LIBRARY 
 
 UNIVERSITY OF CALIFORNIA 
 RIVERSIDE
 
 DURATION OF V 
 MUNICIPAL STREET GRANTS 
 
 BY 
 
 FRED A. gAKER 
 
 OF THE DETROIT BAR. 
 
 Pro bono publico. 
 
 PUBLISHEO FOR THE AUTHOR 
 BY 
 
 RECORD PRINTING CO.. 
 DETROIT, MICH., 
 
 1010.
 
 Copyright, 1910, 
 
 BY 
 
 FRED A. BAKER.
 
 CONTENTS. 
 
 PAGE 
 
 Preface vn 
 
 Introduction. Statement of a case in Michigan.... x 
 
 CHAPTER I. 
 
 The omission from the existing express contracts 
 of the parties, of any covenant on the part of the 
 street railway company to surrender possession 
 at the end of the thirty years, or of any covenant 
 on the part of the city to permit a continuation of 
 the public service after the thirty years have 
 expired, makes the question, whichever way it may 
 be decided, one of implied contract, and the city 
 must rely on the law of implied contracts, as well 
 as the street railway company. 
 
 Applying the law of implied contracts to the grants 
 made to the Detroit City Railway in 1862 and 
 1879 the conclusion is irresistable that the right of 
 the company, its successors and assigns, to main- 
 tain and operate its street railways on the streets 
 of the city extends beyond the designated period 
 of thirty years 1 
 
 CHAPTER II. 
 
 The Detroit United Railway is under an obligation 
 to the State of Michigan from which it received 
 its corporate franchises to operate its street rail- 
 ways for the public use, during the entire period 
 for which the company was incorporated, and at 
 or before its expiration, to reorganize itself or to 
 turn the property over to another company, to con- 
 tinue the service it renders the public 33
 
 11. 
 CHAPTER III. 
 
 The streets and highways of the city of Detroit are 
 not the property of the city, or of the inhabitants 
 of the city. They belong to the general public, 
 that is, to the people of the state and their visitors 
 from other states and countries. So far as the 
 municipal authorities have been given any title to 
 or power of control over the streets, the same is 
 held in trust for the benefit of the general pub- 
 lic ; and any ordinance or resolution of the common 
 council, which would be detrimental to the general 
 public, would be a breach of the trust, and illegal 
 and void 55 
 
 CHAPTER IV. 
 
 Whatever view may be taken of the original con- 
 tracts between the street railway company and the 
 city, it is certain that under the conditions exist- 
 ing in 1909 and 1910, the city has no power at the 
 expiration of the thirty years to expel the street 
 railways from the streets of the city 73 
 
 CHAPTER V. 
 
 Retrospectively and prospectively considered the 
 Michigan constitution of 1908 strengthens the prop- 
 osition that street grants for public utilities of a 
 permanent nature necessarily contemplate that the 
 public service is to continue beyond the period of 
 limitation fixed by the local authorities 84 
 
 CHAPTER VI. 
 
 Conclusive proof of the implied obligation of the 
 city of Detroit to permit the street railway service 
 to continue after Nov. 14, 1909, is found in the
 
 111. 
 
 fact that the public service is of such paramount 
 and overwhelming importance that the common 
 council of the city could not be induced, with any 
 intention that its order would be obeyed or en- 
 forced, to pass a resolution directing the Detroit 
 United Railway to stop operating its cars Nov. 
 14, 1909, and to remove its tracks and overhead 
 structures from the streets 97 
 
 CHAPTER VII. 
 
 A municipal street grant does not establish the tech- 
 nical relation of landlord and tenant, which ex- 
 ists in the case of a private landlord and his priv- 
 ate tenant; and for two reasons: (1) the munici- 
 pality, as the alleged landlord, is a mere trustee 
 for the public; and (2) the company grantee, as 
 the alleged tenant, is under a legal obligation to 
 serve the public. Hence, whatever the contract 
 between the municipality and the company may 
 be, it is subject to the superior and predominate 
 rights of the public 119 
 
 CHAPTER VIII. 
 
 The correct construction of the Michigan street rail- 
 way act is, that the "consent" of. the local author- 
 ities, is in its nature perpetual; that the local 
 authorities are given power to fix the rules, regu- 
 lations and conditions on which they will grant 
 their consent and to agree with the grantee on the 
 rates of fare and may limit the duration of their 
 contract, but can not put a time limit on the local 
 "consent" ; and that at the expiration of any period 
 of time agreed upon, the grantee, its successors or 
 assigns, may continue to occupy the streets, sub-
 
 IV. 
 
 ject to such rules, regulations and conditions and 
 rates of fare as the law (in the absence of a local 
 agreement) imposes 140 
 
 CHAPTER IX. 
 
 The rule that public grants are to be construed strict- 
 ly, in favor of the grantors and against the 
 grantee, furnishes abundant proof that the Detroit 
 United Kailway has a right to continue to occupy 
 the streets and to serve the public beyond the 
 period of thirty years 155 
 
 CHAPTER X. 
 
 Recent street railway history in Ohio shows the 
 necessity of avoiding similar conditions in Michi- 
 gan 161 
 
 CHAPTER XI. 
 
 The final and conclusive argument in support of the 
 proposition that the local consent is perpetual, 
 and only the terms and conditions and the rates 
 of fare are subject to time limitations, is found in 
 the fact that in making a street grant the local 
 authorities act in two different capacities: (1) in 
 granting the local consent and designating the 
 streets, the Aldermen act as the agents of the state 
 under authority delegated to them by the legisla- 
 ture; and (2) in agreeing with a street railway 
 company on rates of fare, and the other terms and 
 conditions, the Aldermen act by permission of the 
 legislature as the contractual agents and repre- 
 sentatives of the people of the municipality, in 
 virtue of their election by the people to manage 
 and control their local affairs. . 186
 
 V. 
 
 CHAPTER XII. 
 
 There are many practical reasons concerning the 
 welfare and happiness of the people, why the street 
 railway business of the city of Detroit, and its 
 suburbs, cannot be conducted on the theory, that 
 at the expiration of municipal street grants, the 
 municipalities have the power to dictate terms and 
 conditions and rates of fare, regardless of the ques- 
 tion whether they are reasonable or unreasonable 205 
 
 CHAPTEE XIII. 
 
 "No more public service franchises on any terms, 
 and the termination of all existing grants at the 
 earliest possible date. 
 
 "Government by the people, and not by private cor- 
 porations" 225 
 
 CHAPTER XIV. 
 
 One of the great merits of requiring or permitting 
 street railway corporations to maintain and oper- 
 ate their railways subject only to the legal obli- 
 gation to charge reasonable fares, is, that it does 
 away with the real and pretended reasons for 
 municipal ownership 228 
 
 CHAPTER XV. 
 
 The Supreme Court of the United States has author- 
 itatively established the doctrine that the reason- 
 ableness of a given rate of fare or freight of a pub- 
 lic service corporation, is a judicial question, and 
 that any legislative or executive action, anywhere 
 in the United States or in any territory subject 
 to their jurisdiction, purporting to conclusively 
 fix rates or charges, without permitting a determin-
 
 vi. 
 
 ation of the question by the judiciary, after a full 
 hearing, is a deprivation of property without due 
 process of law, and unconstitutional and void. . . . 233 
 
 APPENDIXES. 
 
 No. 1. Indiana Street Railway Statute 239 
 
 No. 2. Chicago Street Railway Ordinance 253 
 
 No. 3. Cleveland Street Railway Ordinance 324 
 
 No. 4. Tables showing influence of gold on prices . . 375
 
 Vll. 
 
 PREFACE. 
 
 My only excuse for publishing in book form for gen- 
 eral circulation, a brief written in the interest of a 
 client, is, that the subject of the duration of street grants 
 and franchises is of great importance to the legal pro- 
 fession and municipal authorities, and to bankers, trust 
 companies, and other investors, not only, in Michigan, 
 but also throughout the United States and Canada; and 
 no discussion of a legal question is as valuable as that 
 which concerns an actual case. 
 
 For eighteen years it has been assumed and the im- 
 pression has prevailed in municipal, partisan and news- 
 paper circles in the city of Detroit, that when a street 
 grant to a public service corporation expires by its own 
 limitation, the municipal authorities have power to de- 
 stroy the property of the grantee, by compelling it to 
 stop operation and to remove from the streets; or, by 
 imposing such rates of fare, or prices for the services 
 rendered, as to amount to a practical destruction of the 
 property; and that this can be done without interference 
 on the part of the judiciary. 
 
 My object in bringing together the authorities on 
 which the question depends, and to which the learned 
 judges must resort in determining it, is to show that the 
 municipal authorities have no such arbitrary and con- 
 fiscatory power. 
 
 When an original street grant is made by a municipal- 
 ity to a public service corporation the local authorities 
 are in a position to impose such terms and conditions as
 
 Till. 
 
 are satisfactory to them, but the corporation grantee, 
 not having yet made any investment, is in a position to 
 reject a grant that is not satisfactory to it. 
 
 When a grant expires after the public improvement 
 has been constructed and perhaps has been in operation 
 for many years, the situation of the parties is radically 
 different, and they are not on an equal footing. Obvious- 
 ly neither of them ought to have any absolute power in 
 the premises; and the courts on a proper presentation 
 of the controversy ought to exercise their jurisdiction, 
 and ought to have power to determine, what under all 
 the facts and circumstances is just and reasonable. 
 
 In writing this brief the effort has been to show that 
 such is the law. 
 
 It must not, even for a moment, be assumed that my 
 contention is that a municipal street grant, with all its 
 terms and conditions and rates of fare, or prices, is 
 perpetual. Where the grant is for a limited period, the 
 terms and conditions and rates do expire at the end 
 of the period; but the right to maintain and operate the 
 property does not expire. That right continues but it 
 must be exercised, in the absence of a new agreement, 
 subject to the legal obligation of all public service cor- 
 porations to perform the service for which they are 
 created, for reasonable compensation. In that sense 
 the right to maintain and operate is perpetual. 
 
 The old terms and conditions will be regarded as 
 prima facie reasonable, but if they are found to be other- 
 wise, the courts will overturn them. 
 
 I do not think I have made myself sufficiently clear 
 and plain to convince any one against his will; but to 
 those of my dear readers, who are in a position to exer- 
 cise an independent, impartial and just judgment, the
 
 IX. 
 
 following pages are submitted, with full confidence that 
 the arguments therein set forth, will not be lightly re- 
 jected. 
 
 In the Appendix will be found the Indiana street rail- 
 way law of March 3, 1899; the Chicago street railway 
 ordinance of February 11, 1907; and the Cleveland street 
 railway ordinance of December 18, 1909; each of which 
 was for the purpose of settling a great street railway 
 controversy. 
 
 My primary purpose in publishing these as an appen- 
 dix, is to show the careful way in which they preserve 
 the street railways as permanent public improvements 
 and perpetual investments and wholly eliminate the al- 
 leged power of municipalities at the expiration of local 
 grants to confiscate or destroy street railway property. 
 
 But the Indiana statute, and the Chicago and Cleve- 
 land ordinances are also very instructive in their details, 
 as they were framed and agreed upon after protracted 
 controversy and discussion and great consideration. They 
 deserve a careful reading by every one called upon to 
 frame, recommend, or adopt or accept, a municipal street 
 railway grant. 
 
 FRED A. BAKER. 
 
 Detroit, Mich., March 1, 1910.
 
 INTRODUCTION. 
 
 STATEMENT OF A CASE IN MICHIGAN. 
 
 The Michigan constitution of 1850 contains the follow- 
 ing provisions: 
 
 "Corporations may be formed under general laws, but 
 shall not be created by special act except for municipal 
 purposes. All laws passed pursuant to this section may 
 be amended, altered or repealed." 
 
 "No corporation except for municipal purposes or for 
 the construction of railroads, plank roads and canals 
 shall be created for a longer time than thirty years." 
 
 These provisions are significant in two particulars: 
 (1) they recognize the principle that the franchises of 
 corporate existence and to conduct a given business as 
 a corporation are rights or privileges granted by the 
 state, and not by the county, township, village or city 
 in which the corporation may be located; (2) they also 
 recognize the fact that public service corporations, such 
 as railroad, plank road and canal companies are organ- 
 ized to construct permanent public improvements, the 
 usefulness of which would be much longer than thirty 
 years. 
 
 Railroad, plank road, and canal companies were the 
 only public service corporations known to the people of 
 the state in 1850, and there can be no doubt that if street 
 railways had then been in existence, they would have 
 been included in the exceptions. 
 
 As a street car line is in every sense of the word a 
 railroad, the legislature could, under any fair and reason-
 
 XI. 
 
 able construction of the constitutional provision, author- 
 ize the formation of street railway corporations to exist 
 for more than thirty years. The United States Circuit 
 Court of Appeals for the Sixth Circuit has expressed an 
 opinion to the contrary. (Detroit, etc., Co. vs. Detroit. 
 12 C. G. A. 365; 64 Fed. 628). 
 
 However, the question is not of very much practical 
 importance because the street railroad laws of Michigan 
 have always limited the existence of street railway cor- 
 porations to thirty years; but this lias not been done on 
 the theory that street railways were only to exist for 
 thirty years. Their permanent nature has never been 
 questioned. 
 
 Under the national bank act the stockholders of a 
 bank, are only permitted to maintain corporate succes- 
 sion for twenty years; but that does not signify that the 
 business and good will of the bank are to be destroyed at 
 the end of the twenty years, for the stockholders, or such 
 of them as see fit to join therein, are at liberty to organ- 
 ize a new corporation, and take over the assets and lia- 
 bilities of the old corporation, the charter of which has 
 expired or is about to expire. 
 
 The twentj- years limitation simply compels liquida- 
 tion. A stockholder can not be forced to join the new 
 corporation. He can compel those who do, to make n 
 fair and just liquidation, if need be, by a public and 
 properly conducted sale of the assets. (Mason vs. Peuxi- 
 bic Mining Co., 133 U. S. 50.) 
 
 But that does not necessitate a destruction of the 
 business, or of its good will. These would remain in- 
 tact even on a public sale. 
 
 A street railway corporation incorporated for a lim- 
 ited period, occupies a similar position, with the addi-
 
 tional feature that it maintains and operates a property 
 devoted to the public use, and the necessity of preserv- 
 ing the property and continuing the service, after the 
 corporate life of the company has expired, creates a 
 greater necessity for the organization of a new corpora- 
 tion to become its successor. The laws of Michigan per- 
 mit this to be done, and contemplate that it will be done. 
 In 1855 the Michigan legisulature passed the Train 
 (Tram) railway act (Laws of 1855, page 338; 2 C. L. 
 1897, p. 2027.) 
 
 The principal purpose of that act was to provide tram- 
 ways for the transportation of copper and iron ores, coal 
 and lumber from the mines and mills of the state to the 
 lakes. A toll of four cents a mile for each car and for 
 each ton of ore, coal er lumber carried, was authorized 
 (Sec. 13.) 
 
 In 1861 the act was amended by the addition of two 
 sections authorizing the organization under it of street 
 railway corporations. (Laws of 1861, />. 12; 2 C. L. 
 1897, p. 2035.) 
 
 It was enacted that "no such company or corporation 
 shall be authorized to construct a railway under this act 
 through the streets of any town or city without the con- 
 sent of the municipal authorities of such town or city 
 and under such regulations and upon such terms and 
 conditions as said authorities may from time to time 
 prescribe." (Sec. 34.) 
 
 In 1867 the following proviso was added to Sec. 34: 
 "Provided further that after such consent shall have 
 been given and accepted by the company or corporation 
 to which the same is granted, such authorities shall make 
 no regulations or conditions whereby the rights or fran- 
 chises granted shall be destroyed or unreasonably im-
 
 nil. 
 
 paired or said company or corporation be deprived of the 
 right of constructing, maintaining and operating such 
 railway in the streets in such consent and grant named 
 pursuant to the terms thereof." (Laios of 1867, p. 257.) 
 
 At the same session of the legislature an independent 
 street railway act was passed. (Id., p. 46; 2 C. L. 1897, 
 p. 2057.) 
 
 That act provides for the incorporation of street rail- 
 way companies, and authorizes them to construct and 
 operate street railways on the streets "with the consent 
 of the corporate authorities of the city or village given 
 in and by an ordinance or ordinances duly enacted for 
 the purpose and under such rules, regulations and con- 
 ditions as in and by such ordinance or ordinances shall 
 be prescribed." 
 
 A written acceptance of the terms and conditions is 
 required. (Sec. 13.) 
 
 The act further provides : 
 
 "After any city, village or township shall have con- 
 sented as in this act provided, to the construction and 
 maintenance of any street railways therein, or granted 
 any rights and privileges to any such company, and such 
 consent and grant have been accepted by the company, 
 such township, city or village shall not revoke such con- 
 sent, nor deprive the company of the rights and privileges 
 so conferred." (Sec. 14.) 
 
 "The rates of toll or fare which any street railway 
 company may charge for the transportation of persons 
 or passengers over their road, shall be established by 
 agreement between such company and the corporate au- 
 thorities of the city or village where the road is located, 
 and shall not be increased without consent of such au- 
 thorities." (Sec. 20.)
 
 XIV. 
 
 The first street railway grant by the city of Detroit 
 was by an ordinance approved November 24, 1862. This 
 ordinance was amended December 27, 1862, and January 
 12, 1863, and soon afterwards it was accepted and acted 
 upon by the corporation known as the "Detroit City 
 Railway." 
 
 By section 20, it was stipulated: 
 
 "The power and privileges conferred by the provisions 
 of this ordinance shall be limited to thirty years from 
 the date of its passage." 
 
 And it was further stipulated: 
 
 "The rate of fare for any distance shall not exceed 
 five cents in any one car or on any one route named in 
 this ordinance," etc. (Sec. 8.) 
 
 Authority to make extensions and to build new lines 
 was given the Detroit City Railway from time .to time, 
 and it acquired lines built by other companies. 
 
 By an ordinance approved Nov. 14, 1879, an extension 
 of the time limitation was granted the Detroit City Rail- 
 way, by the following stipulation: 
 
 "The powers and privileges conferred and obligations 
 imposed by the ordinance passed November 24, 1862, 
 and the amendments thereto are herebj* extended and 
 limited to thirty years from this date." (Sec. 5.) 
 
 The thirty years expired November 14, 1909, and as no 
 extension or new grant and contract between the Detroit 
 United Railway (which has succeeded to the title of the 
 Detroit City Railway) and the city of Detroit has been 
 made or entered into, the question whether the street 
 railway company, since November 14, 1909, has any 
 rights the city is bound to respect, becomes a practical 
 one.
 
 XV. 
 
 The street railway routes concerned are the main, cen- 
 tral lines of the city; they constitute the back bones and 
 ribs of a much larger system, and furnish the means of 
 transportation for a city and suburban population of 
 over 500,000 people. 
 
 The interests of the public demand that the service 
 these lines render shall not be suspended for a single 
 day or hour. 
 
 What then are the rights and obligations of the Detroit 
 United Railway and the city of Detroit in the premises? 
 
 Conversely stated the question is: 
 
 Has the city of Detroit the right, by a resort to force 
 or by legal proceedings, to compel the Detroit United 
 Railway to cease the operation of its railways on the 
 streets covered by the expired grants; or 
 
 Has the Detroit United Railway the right after the 
 expiration of the thirty 3*ears to remain in the streets 
 and continue to serve the public?
 
 DURATION OF MUNICIPAL STREET GRANTS. 
 
 I. 
 
 The omission from the existing express contracts 
 of the parties of any covenant on the part of the 
 street railway company to surrender possession at 
 the end of the thirty years or of any covenant on the 
 part of the city to permit a continuation of the public 
 service after the thirty years have expired makes the 
 question, whichever way it may be decided, one of 
 implied contract, and the city must rely on the law 
 of implied contracts, as well as the street railway com- 
 pany. 
 
 Applying the law of implied contracts to the grants 
 made to the Detroit City Railway in 1862 and 1879 
 the conclusion is irresistible that the right of the com- 
 pany, its successors and assigns, to maintain and 
 operate its street railways on the streets of the city 
 extends beyond the designated period of thirty years. 
 
 All well drawn leases of real estate for a term of 
 years, by private owners, contain an express covenant on 
 the part of the tenant to surrender and yield up posses- 
 sion of the premises at the expiration of the term. The 
 blank leases sold by Eichmond & Backus of Detroit, the 
 principal blank printers in Michigan, contain such a 
 clause. The tenant agrees to surrender the property a; 
 the end of the term "in like condition as when received 
 by him, reasonable use and wear thereof and damages by 
 the elements excepted."
 
 If a lease, either oral or written, is made without such 
 a covenant, the obligation of the tenant to surrender 
 possession at the end of the term will be implied. The 
 implied covenant arises from the rights attaching to the 
 private ownership of land, and from the nature of the 
 transaction between the parties when the tenancy is 
 created. 
 
 Whether in any contract there is an implied covenant 
 or obligation depends on the subject matter and all the 
 surrounding facts and circumstances. 
 
 This is well illustrated by the case of Carpenter vs. 
 United States., 17 Wall., 489, where it was held that when 
 defendant has entered and occupied land by permission 
 of the plaintiff without any express contract, the law im- 
 plies a promise on his part to make compensation or pay 
 a reasonable rent for his occupation ; but if the entry has 
 been made under an agreement to purchase, the pur- 
 chaser is not liable for rent, because: "A contract can- 
 not arise by implication of law under circumstances the 
 occurrence of which neither of the parties ever had in 
 contemplation." 
 
 In the Michigan case of Marquette Houghton & On- 
 tonagon R. R. vs. Harlow, 37 Nidi., 554, the railroad 
 company had taken possession of Harlow's land, and he 
 sued in assumpsit for use and occupation of land. 
 
 Campbell, J., for the court said : 
 
 "Harlow never expected to get rent and never had any 
 expectation of getting any settlement except for the 
 entire appropriation of the land. He repudiated any 
 rights in the company to remain in possession. He chose 
 to keep himself in an adverse position and not under con- 
 tract. There could be no plainer denial of privity than 
 he has given. It needs no discussion to determine that 
 a party who asserts adverse rights cannot at the same
 
 time claim the existence of rights or duties arising out 
 of a tenancy by contract. Ward vs. Warner, 8 Mich., 
 508." 
 
 It is plain that the fact that the ordinances constitut- 
 ing the contract now existing between the Detroit United 
 Railway and the City of Detroit contain no provision 
 fixing the rights of the parties after the expiration of the 
 period of thirty years, makes the case one of implied 
 contract. 
 
 If the city claims it has the right to compel the com- 
 pany to remove its tracks from the streets, it can only 
 establish that right by demonstrating that such was the 
 implied understanding that is, the city must resort to 
 an implication. 
 
 If the company claims that it has the right in the 
 absence of an extension or a new agreement, to remain 
 in the streets and to continue its service to the public, 
 beyond the thirty years, it too must resort to an impli- 
 cation. 
 
 Neither party has any advantage over the other. 
 
 Whether the implied contract should be held to be the 
 one thing or the other, depends on a full and candid 
 consideration of the subject matter, the relations of the 
 parties to each other, and to the general public, and all 
 the material facts and circumstances. 
 
 IMPLIED CONTRACTS. 
 
 The books of the law are full of cases enforcing im- 
 plied contracts, covenants and promises, but before we 
 undertake to review the authorities it is advisable to get 
 thoroughly in mind the distinction which divides implied 
 contracts into two classes: (1) Contracts implied in 
 fact, that is, actual contracts, and (2) contracts implied
 
 in law, or contracts imposed and created 1 by the law, 
 where there is no pretense that the obligor agreed or 
 intended to agree to do or not to do the particular thing 
 in question. 
 
 This distinction is commented upon in a recent case in 
 Illinois (Chudnovski vs. Eckels, 232 III., 312). 
 
 The municipal court of Chicago had jurisdiction in 
 "all actions on contracts express or implied," and an 
 action was brought in that court on the implied contract 
 of a street railway company to carry safely passengers 
 who enter its cars. The jurisdiction was sustained, on 
 the ground that there was an actual contract arising from 
 the invitation of the street railway company to the public 
 to ride on its cars and the acceptance of the plaintiff as 
 a passenger. As the company was a common carrier and 
 a public service corporation it was under a legal obliga- 
 tion to carry passengers, and the case is one where there 
 was not only an implied contract in fact, but also an 
 implied contract in law, which shows that legal obliga- 
 tions may have an important bearing on the question 
 whether the parties have entered into an actual contract. 
 
 The court cited a case in California decided by Field, 
 J., when he was one of the judges of the State Supreme 
 Court, and a case in the Supreme Court of the United 
 States in which he delivered the opinion of the court. 
 (Ar -genii vs. Francisoo, 16 Col., 282; Steamship Co. vs. 
 Joliffe, 2 Wall., 450. ) 
 
 Judge Field cited Maines Ancient Law, which says: 
 
 "The part of Bornan Law which has had most exten- 
 sive influence on foreign subjects of inquiry has been the 
 law of Obligation, or, what comes nearly to the same 
 thing, of Contract and Delict. The Romans themselves 
 were not unaware of the offices which the copious and
 
 malleable terminology belonging to this part of their 
 system might be made to discharge, and that is proved by 
 their employment of the peculiar adjunct Quasi in such 
 expressions as Quasi-contract and Quasi-Delict. "Quasi," 
 so used, is exclusively a term of classification. It has 
 been usual with English critics to identify the quasi- 
 contracts with implied contracts, but this is an error, 
 for implied contracts are true contracts, which quasi- 
 contracts are not. In implied contracts, acts and cir- 
 cumstances are the symbols of the same ingredients 
 which are symbolized in express contracts, by words; 
 and whether a man employs one set of symbols or the 
 other must be a matter of indifference so far as concerns 
 the theory of agreement. But a quasi contract is not a 
 contract at all. The commonest sample of the class is 
 the relation subsisting between two persons, one of whom 
 has paid money to the other through mistake. The law, 
 consulting the interests of morality, imposes an obliga- 
 tion on the receiver to refund, but the very nature of the 
 transaction indicates that it is not a contract, inasmuch 
 as the convention, the most essential ingredient of con- 
 tract, is wanting. This word "quasi," prefixed to a term 
 of the Roman law, implies that the conception to which 
 it serves as an index is connected with the conception 
 with which the comparison is instituted by a strong 
 superficial analogy or resemblance. It does not denote 
 that the two conceptions are the same, or that they 
 belong to the same genus. On the contrary, it negatives 
 the notion of an identity between them; but it points 
 out that they are sufficiently similar for one to be classed 
 as the sequel of the other, and that the phraseology 
 taken from one department of law may be transferred to 
 the other, and employed without violent straining in the 
 statement of rules which would otherwise be imperfectly 
 expressed."
 
 In a case in Massachusetts the court said : 
 
 "A contract may be expressly made, or a contract may 
 be inferred or implied when it is found that there is an 
 agreement of the parties and an intention to create a 
 contract, although that intention has not been expressed 
 in terms of contract; in either case there is an actual 
 contract. But a contract is sometimes said to be implied 
 when there is no intention to create a contract, and no 
 agreement of the parties, but the law has imposed an 
 obligation which is enforced as if it were an obligation 
 arising ex contractu. In such a case there is not a con- 
 tract, and 1 the obligation arises ex lege. (Milford vs. 
 Commonwealth, 144 Mass., 64. ) 
 
 In that case jurisdiction was given to the Superior 
 Court "of all claims against the commonwealth which are 
 founded on contract for the payment of money." And 
 their statute provided that the commonwealth should 
 reimburse a city or town for the support of a person in- 
 fected with smallpox or other disease dangerous to the 
 public health; and the question was whether this statu- 
 tory liability was a claim founded on contract. 
 
 The state not being subject to action, except with its 
 own consent, the court was of the opinion that it was 
 not the intention to give the superior court jurisdiction 
 over obligations for the payment of money imposed by 
 statute upon the commonwealth. In other words, the 
 court held that the statute conferring jurisdiction on the 
 superior court had reference to actual contracts, as dis- 
 tinguished from obligations imposed by the law. 
 
 Except as it may affect the remedies open to the 
 obligee, it can be of little consequence to the obligor 
 whether his obligation is regarded as an implied contract, 
 ex contractu, or an implied contract ex lege, for whether 
 it is the one or the other, he is equally bound. Hence
 
 it is that the most learned law writers and 1 judges have 
 not in many instances attempted to classify implied con- 
 tracts, but have treated them all as belonging to one 
 general class. 
 
 Blackstone, in his Commentaries, 3 Vol., p. 158, after 
 defining express contracts, continues as follows: 
 
 "Prom these express contracts the transition is easy 
 to those that are only implied by law, which are such as 
 reason and justice dictate, and which, therefore, the law 
 presumes that every man has contracted to perform; 
 and. upon this presumption makes him answerable to such 
 persons as suffer by his non-performance." 
 
 He then considers the class of implied contracts found- 
 ed' upon a person's obligations to society and to the 
 government under which he lives. He then says: "A 
 second class of implied contracts are such as do not 
 arise from the express determination of any court, or 
 the positive direction of any statute; but from natural 
 reason and the just construction of law. Which class 
 extends to all presumptive undertakings or assumpsits; 
 which, though never perhaps actually made, yet con- 
 stantly arise from this general implication and intend- 
 ment of the courts of judicature, that every man hath 
 engaged to perform what his duty or justice requires." 
 
 Chitty on Contracts, p. 18, adopts Blackstone's defini- 
 tion of implied contracts. 
 
 2 Parsons on Contracts, p. 575 : 
 
 "The general ground of a legal implication is that the 
 parties to the contract would have expressed that which 
 the law implies had they thought of it, or had they not 
 supposed it was unnecessary to speak of it because the 
 law provided for it."
 
 8 
 
 Addison on Contracts, p. 23 : 
 
 "Implied contracts have sometimes been divided into 
 inferred contracts, implied contracts properly so called, 
 and constructive contracts. A contract is said to be 
 inferred where the intention of the parties is not ex- 
 pressed in words, but may be gathered from their acts 
 and surrounding circumstances. In these cases the law 
 enforces what it deems to have been the intention of the 
 parties." 
 
 "It not infrequently happens that in the course of car- 
 rying out a contract circumstances arise which have not 
 been contemplated by the parties, and consequently 
 where no intention has been expressed by them, or can 
 be inferred from their acts. In such cases the law pre- 
 scribes their respective rights and liabilities according 
 to the dictates of justice that is, of general expediency, 
 according to what it is presumed their intention would 
 have been had they had those circumstances in their 
 consideration when they made the contract." 
 
 Chief Justice Marshall, in Ogden vs. Saunders, 12 
 Wheat., 214, said : 
 
 "A great mass of human transactions depends upon 
 implied contracts; upon contracts which are not written, 
 but which grow out of the acts of the parties. In such 
 cases the parties are supposed to have made those stipu- 
 lations which, as honest, fair and just men, they ought 
 to have made. When the law assumes that they have 
 made these stipulations, it does not vary their contract 
 or introduce new terms into it, but declares that certain 
 acts, unexplained by compact, impose certain duties and 
 that the parties had stipulated for their performance." 
 
 The Supreme Court of Iowa, recently, Ottumwa, etc., 
 vs. Manchester, 115 N. W., 911, in a case calling for an 
 application of the law of implied contracts, said:
 
 "A contract or promise to do a certain thing may, of 
 course, be implied from circumstances or from the con- 
 duct of the party sought to be charged. Implied con- 
 tracts are such as reason and justice dictate, and which, 
 therefore, the law presumes that every person under- 
 takes to perform." 
 
 In Turner vs. Jones, 1 Lansing (N. I 7 .), 147, 148, Mar- 
 vin, P. J., said : 
 
 "But in the absence of an express promise, I under- 
 stand it to be a general principle to imply a promise if 
 the facts are such as in equity and good conscience re- 
 quire a promise. Promises are implied in a large por- 
 tion of the transactions of life." 
 
 In Brackett vs. Norton., 4 Conn., 517, 524, Hosmer, 
 C. J., cites Blackstone's definition of implied contracts, 
 that they are such as reason and justice dictate, and then 
 says : 
 
 "Upon this principle the court may, and often does 
 presume, the extent of an agency from the nature of the 
 case; and hence a contract, either necessary or highly 
 expedient in the attainment of a given object, is reason- 
 ably to be inferred." 
 
 In Webster vs. Upton, 91 U. S., 65, 72, the court held 
 that a transferee of stock in an incorporated company is 
 liable for calls of the unpaid portion of his stock, made 
 after he has been accepted by the company as a stock- 
 holder, and after his name has been registered as a 
 stockholder. 
 
 The court held that there was a necessary implication 
 that such transferee would complete the payment of all 
 that was unpaid of the shares he held whenever it should 
 be demanded.
 
 10 
 
 "To constitute a promise binding in law, no form of 
 words is necessary. An implied promise is proved by 
 circumstantial evidence; by proof of circumstances that 
 show the party intended to assume an obligation. A 
 party may assume an obligation 1 by putting himself into 
 a position which requires the performance of duties." 
 
 Hunter vs. New York and Saginaw Solar Salt Com- 
 pany, 14 Michigan, 90, is a case where the defendant, the 
 salt company, contracted for the purchase of two million 
 feet of lumber from Babcock and Bliss, and a like quan- 
 tity from F. P. Sears & Company, and then entered into 
 a contract with Hunter, the plaintiff, for the removal of 
 the lumber to the docks of the defendant, where the lum- 
 ber was to be used by one Burrell, who had the contract 
 for constructing solar salt works for defendant. Bab- 
 cock and Bliss and F. P. Sears & Co. did not saw and 
 deliver on their docks the full amount of lumber. Hunter 
 removed to the docks of the salt company all the lumber 
 that was sawed and delivered, and was paid the contract 
 price of $1.00 per thousand feet. He then brought an 
 action to recover damages from the salt company for not 
 having been permitted to remove the whole amount of 
 lumber and for having been prevented from earning the 
 contract price of $1.00 per thousand for that portion of 
 the lumber not furnished at all. 
 
 The theory of the plaintiff's action was that the de- 
 fendant was bound to provide the whole amount of lum- 
 ber, and that it guaranteed the performance by Babcock 
 and Bliss and by F. P. Sears & Company of their con- 
 tracts. The court, in an opinion by Christiancy, J., was 
 of a contrary opinion. 
 
 He said: 
 
 "Taking the whole contract together, it is clearly im- 
 plied that these stipulations are subject to the implied
 
 11 
 
 condition that Babcock and Bliss and Sears & Company 
 should first saw and deliver the lumber under their 
 contracts." 
 
 In Ex parte Ford, In re Chappell, 16 Q. B. Div., 305, 
 a second mortgagee, in order to enable the mortgagor to 
 obtain a further advance from the first mortgagee, agreed 
 to postpone his mortgage and make it subordinate to the 
 fresh advance. The mortgagor became bankrupt, and 
 when the property was afterwards sold by the first mort- 
 gagee, the proceeds were insufficient to pay the whole 
 amount due to him, though they did exceed the amount 
 originally secured by the first mortgage. 
 
 Held, that the second mortgagee was entitled to prove 
 in the bankruptcy for the amount which he would have 
 received out of the proceeds of the sale if he had not con- 
 sented to postpone his charge, on the ground that the 
 court was entitled to infer an implied promise by the 
 bankrupt to indemnify the second mortgagee against any 
 loss which might result from the postponement of his 
 charge. 
 
 "Lord Esher. M. K. It seems to me that whenever 
 circumstances arise in the ordinary business of life in 
 which, if two persons were ordinarily honest and careful, 
 the one of them would make a promise to the other, it 
 may properly be inferred that both of them understood 
 that such a promise was given and accepted. When, in 
 the present case, one brother, at the request of the other, 
 gave up and postponed a right which he had, from which 
 postponement it was very probable that a loss might 
 result to him, it seems to me that ordinary people would 
 have intended that the brother, for whose benefit the 
 postponement was made, should promise to indemnity 
 the other against any resulting loss. I think there is
 
 12 
 
 evidence from which the proper tribunal might infer 
 that such a promise was given. The proper tribunal has 
 drawn that inference, and I see no reason for interfering 
 with their conclusion. 
 
 "Cotton, L. J. I am of the same opinion. The point 
 is a nice one. The brother, at the request of the bank- 
 rupt, agreed to deal with his security in such a way that 
 it became liable to be defeated. I do not see that there 
 is any evidence that Dr. Chappell intended to make a 
 present of his security to his brother. I think, therefore, 
 that the proper inference to draw is that it was intended 
 that he should be indemnified by his brother in case any 
 loss should result to him." 
 
 "Lindley, L. J. I am of the same opinion. No doubt 
 there is at first sight a little difficulty in the case; but, 
 in substance, Dr. Chappell's interest in the property has 
 been applied in paying his brother's debt, and it seems 
 to me that there is good ground for inferring a promise 
 on the part of his brother to indemnify him. It is said 
 that this promise ought not to be implied, because the 
 deed which was executed at the time contains no provi- 
 sion for indemnity, but that deed was executed for a 
 limited purpose, viz: the postponement of Dr. Chappell's 
 security, and it appears to me quite consistent with the 
 deed that a promise to indemnify him should be implied." 
 
 Genet vs. Delaware & Hudson Canal Co., 136 N. Y., 
 593, 608, involved the construction of an agreement to 
 work a coal mine and pay Mrs. Genet, the owner, a roy- 
 alty. The mine had three veins, and the defendant negli- 
 gently mined the middle vein and left such insufficient 
 support that the rock, earth and coal above fell down 
 into and ruined the mine and the whole body of coal 
 was lost. 
 
 Held, that although there was no express stipulation
 
 13 
 
 in the contract against such negligent destruction of the 
 mine, it was to be implied, and an action could be main- 
 tained upon the implied promise. At page 608 the court 
 said 1 : 
 
 "I know very well that implied promises are to be 
 cautiously and not hastily raised. What they are was 
 very well stated in Scranton vs. Booth (29 Barb., 174), 
 in Allamon vs. Mayo?' of Albany, (43 id., 36), and in 
 Booth vs. Cleveland Rolling Mills Co. (6 Hun., 597). 
 They always exist where equity and justice require the 
 party to do or to refrain from doing the thing in ques- 
 tion; where the covenant on one side involves same cor- 
 responding obligation on the other; where by the rela- 
 tions of the parties and the subject-matter of the contract 
 a duty is owing by one not expressly bound by the con- 
 tract to the other party in reference to the subject of it. 
 In this court we have thrown some safeguards about the 
 doctrine to secure its prudent application, and have said 
 that a promise can be implied only where we may right- 
 fully assume that it would have been made if attention 
 had been drawn to it (Dermott vs. The State. 99 N. Y., 
 101), and that it is to be raised only to enforce a mani- 
 fest equity or to reach a result which the unequivocal 
 acts of the parties indicate that they intended to effect. 
 (King vs. Leighton, 100 N. Y.; 386.) 
 
 "It seems to me that within the rule of these cases the 
 plaintiff has a right of action upon the implied promise 
 of the defendant not wilfully or negligent!}- to incapaci- 
 tate itself from taking out more than the minimum quan- 
 tity of coal. The acceptance of a minimum royalty for 
 the safety and benefit of the lessees equally with that of 
 the lessor, when a larger one was contemplated on both 
 sides, involves an obligation of the lessee not wilfully or 
 negligently to prevent the expected accruing of the
 
 14 
 
 greater royalty. For, examine the situation at the mak- 
 ing of the contract. The plaintiff owned a tract of coal 
 land, the veins under which held about four millions of 
 tons, which, at twenty thousand tons a year, it would 
 take two hundred years to exhaust, and worth at the 
 small price of this contract, above the mining and mar- 
 keting and the operator's profits, half a million of dol- 
 lars. She desired to utilize so valuable a property. Un- 
 able or unwilling to plant a colliery upon the land, she 
 turns to the defendant. That is a rich and powerful 
 corporation engaged both in mining and transportation. 
 It had mines adjacent, adequate and sufficient plants, 
 large capital, numerous customers, complete control of 
 transportation. The parties sat down to agree. The 
 rate per ton as royalty and the quality and inspection of 
 the coal were settled. Then came the vital inquiry of 
 how much the company would bind itself to mine. It 
 said twenty thousand tons per year. Of course it pro- 
 posed and expected to mine much more than that, and 
 its own business interest would impel it to mine more, 
 but it would not be bound for more than twenty thousand 
 tons. Imagine Mrs. Genet reflecting on the proposition. 
 As an offer to mine twenty thousand tons per year, and 
 no more, she would instantly have refused it. A contract 
 to run for two hundred years was not to be endured, but 
 as an offer to mine at least twenty thousand tons per 
 year, and as much more as the company, with due regard 
 to its business interests and convenience, would take out, 
 the offer was better and not to be curtly rejected. It 
 would be taking a chance, yes; but business largely con- 
 sists in taking chances more or less hopeful or perilous. 
 Mrs. Genet studies this chance. It involves within its 
 possibilities the chief and principal and only tolerable 
 consideration of her bargain. She measures that chance 
 narrowlv. She reasons: there is the coal; I know it.
 
 15 
 
 I am sure of its quality. These men will want it; to get 
 out the twenty thousand tons they will need to sink a 
 shaft, to put up pumps, to establish a plant. Having 
 done so much, their own interest will impel them not to 
 stop at the minimum; they never will stop there, and I 
 will take the chance. Suppose somebody had said to her 
 they may wilfully or negligently destroy your mine, and, 
 with her attention drawn to that suggestion, she had 
 asked the company to agree that it would not do that, 
 is there any doubt that it would have so promised, or 
 that if it deliberately refused, that Mrs. Genet would 
 have declined a contract with such a destructive possi- 
 bility within its admitted scope? But neither party 
 thought of it; both would have deemed it an absurd sug- 
 gestion. There is not the least doubt of the manner in 
 which Mrs. Genet viewed the chance offered to her, of 
 the measure which she took of it, of its boundaries in her 
 mind, nor that the company which held it out to her 
 knew how she regarded it and understood it in the same 
 way on its part. The equity of an implied promise is 
 strong and clear. Good faith, honest dealing, business 
 candor and fairness require that this contract should be 
 enforced in the sense and with the meaning which was in 
 the mind of both parties at the time of its execution. 
 The mine which was to be exhausted and paid for as 
 exhausted is today as much exhausted as if every ton of 
 coal had been taken out and sold. To the plaintiff there 
 is no difference. In either event the coal is gone; and 
 to say that she shall be paid for it at the annual rate of 
 twenty-five hundred dollars a year for two hundred 
 years is to put upon her a contract which she never made 
 and never dreamed of making, and which never entered 
 the mind of the defendant itself until the "squeeze" in 
 the mine suggested an equally destructive pressure of 
 literal construction."
 
 1C 
 
 The foregoing was quoted from and followed in a later 
 case (Wilson vs. Mech Orguinette Co., 170 N. Y., 550). 
 
 Another case (Creamer vs. Met.,, etc., Co., 120 App. 
 Div., 422, 429). 
 
 A contract to receive milk at a factory and manufac- 
 ture it into butter and cheese was held subject to the 
 implied condition that the factory remained in existence 
 (Stewart vs. Stone, 127 N. Y., 500, 507). 
 
 A railroad construction contract provided that the 
 contractors should not sub-contract any part of the work 
 without the consent of the railway company. 
 
 Held, that a sub-contract let without such consent was 
 subject to the implied condition, that if the railway com- 
 pany should interfere, the sub-contractor should be ex- 
 cused from further performance and the contractor re- 
 leased from all liability thereafter accruing (Do-Ian vs. 
 Rogers, 149 N. Y., 489). 
 
 If on a contract for the sale of personal property the 
 title has not passed, and the property is destroyed by 
 fire, the loss falls on the vendor; but he is released from 
 his contract to sell and deliver because of the implied 
 condition, that the property sold should continue in 
 existence until the sale was complete (Dexter vs. Mor- 
 ton, 47 N. Y., 62). 
 
 Contracts for personal services are subject to the im- 
 plied condition that the person shall be able, at the time 
 appointed, to perform them; and if he dies or without 
 fault on the part of the covenanter becomes disabled, the 
 obligation to perform is extinguished. This is so well 
 settled by authority that it is unnecessary to do more 
 than refer to a few of the authorities directly in point
 
 17 
 
 (People vs. Manning, 8 Cow., 297; Jones r.s-. Jndd, 4 A T . 
 Y., 411; Clark vs. Gillbert, 26 N. Y., 279; Wotf/e vs. 
 Howes, 24 #ar&., 174, 666; Grew/ vs. Murray, 3 J. (7. 72.. 
 167; Robinson vs. Davison L. R., 6 Exch., 268). 
 
 In Meyer vs. Richards, 163 ?7. 8., 385, the defendant 
 sold to the plaintiff thirteen bonds of the State of Louisi- 
 ana for $8,383.75. As a matter of fact, the bonds had 
 been fraudulently issued by the state treasurer, who put 
 them on the market surreptitiously and without author- 
 ity, and they were void. 
 
 Held, that under the civil law which prevails in Louisi- 
 ana and the common law of England and the United 
 States, there was an implied warranty by the vendor of 
 the existence and identity of the thing sold, and that the 
 plaintiff was entitled to recover. 
 
 The very learned opinion of the court by Mr. Justice 
 White, in which he made a most careful examination of 
 both the civil and common law, concludes as follows: 
 
 "In passing, however, it is worthy of note that whilst 
 the civil law enforces in the contract of sale generally 
 the broadest obligation of warranty, it has so narrowed 
 it, when dealing with credits and incorporeal rights, as 
 to confine it to the title of the seller and to the existence 
 of the credit sold, and exconverso, the common law, 
 which restricts warranty within a narrow compass, virtu- 
 ally imposes the same duty by broadening the warranty 
 as regards personal property so as to impose the obliga- 
 tion on the vendor to deliver the thing sold as a condi- 
 tion of the principal contract or by implication of war- 
 ranty as to the identity of the thing sold. By these 
 processes of reasoning the two great systems, whilst ap- 
 parently divergent in principle, practically work sub- 
 stantially to the same salutary conclusions."
 
 18 
 
 In West River Bridge Co. vs. Dix, 6 How., 508, the 
 court, at page 532, said: 
 
 "But into all contracts, whether made between states 
 and individuals or between individuals only, there enter 
 conditions which arise not out of the literal terms of the 
 contract itself; they are superinduced by the pre-existing 
 and! higher authority of the laws of nature, of nations, or 
 of the community to which the parties belong; they are 
 always presumed, and must be presumed to be known 
 and recognized by all, are binding upon all, and need 
 ever, therefore, toe carried into express stipulation, for this 
 could add nothing to their force. Every contract is made 
 in subordination to them, and must yield to their control, 
 as conditions inherent and paramount, wherever a neces- 
 sity for their execution shall occur." 
 
 United States vs. Speed, 8 Wall.., 77: The government 
 entered into a contract with the plaintiff to slaughter and 
 pack 50,000 live hogs for it, the government to furnish 
 the hogs, the cooperage, salt and other necessary materials. 
 'The government furnished 17,132 hogs, which were killed 
 and packed, and this service paid for; and failed to fur- 
 nish more. The plaintiff sued in the court of claims for 
 damages and recovered a judgment for |19,720.80, which 
 was affirmed by the Supreme Court. 
 
 Justice Miller, for the 'Court, said : 
 
 "Without entering into a discussion of the general 
 doctrine of the implication of mutual covenants, we deem 
 it sufficient to say that where, as in this case, the obliga- 
 tion of plaintiffs requires an expenditure of a large sum 
 in preparation to enable them to perform it, and a con- 
 tinuous readiness to perform, the law implies a duty in 
 the other party to do whatever is necessary for him to do 
 to enable plaintiffs to comply with their promise or cov- 
 enant. But the last article of the agreement seems to be
 
 19 
 
 an express promise to furnish all the hogs mentioned in 
 the contract." 
 
 The foregoing review of some of the very- large number 
 of decisions concerning actual implied contracts, to be 
 found in the law reports, are sufficient to give us correct 
 information of the principles involved and of the mental 
 processes of the learned judges, in upholding and enforc- 
 ing implied obligations. 
 
 Implied meanings arising out of express contracts, or 
 from the acts and conduct of the parties, are one of the 
 most important elements in the law of contracts, without 
 which there would be a vacuum in the law and a truly 
 chaotic condition, in every case requiring a determination 
 of the rights of the parties to a contract. 
 
 This is also true in the interpretation of constitutions, 
 statutes, and ordinances, including legislative grants of 
 corporate rights and franchises. 
 
 IMPLIED CONTRACTS ARISING FROM CON- 
 TRACTUAL RELATIONS COUPLED WITH A 
 DUTY OR OBLIGATION IMPOSED BY LAW. 
 
 It has always been the law that in the absence of an 
 express contract on the subject, a common carrier is liable 
 in assumpsit on his implied contract, or in tort on his 
 legal duty to carry safely the goods or passengers tendered 
 to him for transportation. 
 
 Joseph Chitty, writing in 1808, said that the action 
 of assumpsit lies "against attorneys and solicitors, wharf- 
 ingers, surgeons, inn-keepers, carriers and other bailees, 
 for neglect or breach of contract" (1 Chitty on Pleadings, 
 102).
 
 20 
 
 And further on at page 134 : 
 
 "And though we have seen that assumpsit is the usual 
 remedy for neglect or breach of duty against bailees; as 
 against carriers, wharfingers, and others having the use 
 or care of personal property, whose liability is founded 
 on the common law as well as on the contract; yet it is 
 clear that they are also liable in case for an injury re- 
 sulting from their neglect or breach of duty in the course 
 of their employment. For any misfeasance by a party in 
 a trade which he professes, the law gives an action upon 
 the case to the party grieved against him; as if a smith 
 in shoeing my horse prick him, and other like cases. And 
 it seems that although there be an express contract, still 
 if a common law duty results from the facts, the party 
 may be sued in tort for any neglect or misfeasance in the 
 execution of the contract." 
 
 The best general statement of the law on the subject 
 I have been able to find is in 1 Gooley on Torts, 103, 106. 
 
 In a note a quotation is made from the opinion of the 
 court by Finch, J., in Rich vs. New York, etc., Co., 87 
 N. ., 382. 
 
 We quote the following: 
 
 "It may be granted that an omission to perform a con- 
 tract obligation is never a tort, unless that omission is also 
 an omission of legal duty. But such legal duty may arise, 
 not merely out of certain relations of trust and confidence, 
 inherent in the nature of the contract itself, as in the 
 cases referred' to in respondent's argument, but may spring 
 from extraneous circumstances, not constituting elements 
 of the contract as such, although connected with and de- 
 pendent upon it, and born of that wider range of legal 
 duty which is due from every man to his fellow, to re- 
 spect his rights of property and person, and retrain from
 
 21 
 
 invading them by force or fraud. It has been well said 
 that the liability to make reparation for an injury rests 
 not upon the consideration of any reciprocal obligation, 
 but upon an original moral duty enjoined upon every 
 person so to conduct himself, or exercise his own rights 
 as not to injure another (Kenvhacker vs. C. C. & C. R. R. 
 Co., 3 Ohio St., 188). Whatever its origin, such legal 
 duty is uniformly recognized, and has been constantly 
 applied as the foundation of actions for wrongs; and it 
 rests upon and grows out of the relations which men 
 bear to each other in the framework of organized society. 
 It is then doubtless true that a mere contract obligation 
 may establish no relation out of which a separate or spe- 
 cific legal duty arises, and yet extraneous circumstances 
 and conditions in connection with it, may establish such 
 a relation as to make its performance a legal duty, and 
 its omission a wrong to be redressed. The duty and the 
 tort grow out of the entire range of facts of which the 
 breach of the contract was but one. The whole doctrine 
 is accurately and concisely stated in 1 Chit. PL, 135, that 
 "if a common-law duty result from the facts the party 
 may be sued in tort for any negligence or misfeasance in 
 the execution of the contract." 
 
 In Piquet vs. Allison, 12 Mich., 328, crops had been 
 put in on the defendant's land on shares. The tenant 
 mortgaged the crops while they were growing to the 
 plaintiffs, who caused them to be harvested, when the 
 defendant drew them off, threshed the grain and put it 
 in his granary, and refused to recognize any rights of 
 plaintiffs or to deliver their share. Held, that assumpsit 
 would lie. 'Campbell, J., for the court, said: 
 
 "The question then arises, whether an action properly 
 lies in assumpsit. It is said in several of the cases that, 
 where property has been tortiously taken, and converted 
 by sale, the owner may affirm the sale and sue for the pro-
 
 22 
 
 ceeds in assumpsit, but that where there has been a con- 
 version without sale, the tort cannot be waived. It cer- 
 tainly is somewhat anomalous to place parties in< contract 
 relations against their will, where no privity exists; and 
 the cases where it is permitted seem to be justified only 
 on the ground that no ^prejudice can result to the defend- 
 ant by allowing it. But where a party commits a breach 
 of a duty, which the law implies from his express con- 
 tract, assumpsit is as appropriate a remedy as any other, 
 if a plaintiff sees fit to resort to it. The plaintiffs here 
 derived their rights, as tenants, from the contract of de- 
 fendant with the grantor, creating the tenancy. The 
 grain being in marketable condition', the co-tenant in pos- 
 session was bound, on reasonable request, to have the 
 plaintiffs' share measured out to them. His own contract 
 precludes him from claiming more than his proportional 
 amount. When he concludes to retain the remainder he 
 certainly is bound to pay for it; and the plaintiffs may, 
 by their consent, convert the transaction into a sale; as it 
 would have been a sale originally had such consent been 
 given at the time. We think no principle of law is vio- 
 lated by allowing the action to be maintained in its 
 present form. 
 
 In Watson vs. Stever, 25 Mich.., 286, the court, per 
 Cooley, J., said: 
 
 "If one has taken possession of property, and sold or 
 disposed of it, and received money or money's worth 
 therefor, the owner is not compellable to treat him as a 
 wrongdoer, but may affirm the sale, as made on his be- 
 half, and demand in this form of action the benefit of the 
 transaction. But we cannot safely say that the law will 
 go very much further than this in implying a promise, 
 where the circumstances repel all implication of a promise 
 in fact. Damages for a trespass are not in general re- 
 coverable in assumpsit; and in the case of the taking of
 
 23 
 
 personal property, it is generally held essential that a sale 
 by the defendant should be shown" (Jones vs. Hoar, 5 
 Pick. Glass Co. vs. Wolcott, 2 Allen, 227; Stearns vs. 
 Dillingham, 22 Vt., 627; Mann vs. Locke, 11 2V. H., 248; 
 Smith vs. Smith, 43 N. H. 536; Willet vs. Willet, 3 
 Watts, 277; Pearsoll vs. Chapin, 44 Pe?w. St., 9; Gutft- 
 rie vs. Wickliffe, 1 A. K. Marsh, 83 ; Fuller vs. Duren, 36 
 A to., 73; Sanders vs. Hamilton, 3 Dana, 552; Barlow vs. 
 Stalworth, 27 #eo., 517; Pifce vs. Bright, 29 AZa., 332; 
 Tucker vs. Jewett, 32 Conn., 563 ; Emerson vs. McNamara, 
 41 Me., 565; Morrison vs. Rogers, 2 Scam., 317; O'Reer vs. 
 Strong, 13 /ft., 688; J&'ZZio** vs. Jackson, 3 Wis v 649). 
 
 "The case of Fiquet vs. Allison-, 12 Mich., 330, on wjiich 
 reliance was placed by defendant in error, is clearly dis- 
 tinguishable from this. There the parties stood in con- 
 tract relations as tenants in common in respect to the 
 property in question; and when the defendant appropri- 
 ated his co-tenant's share, and refused to recognize his 
 right therein, he was, as the court pointed out, guilty of 
 breach of a duty which the law implied from his express 
 contract. This case presents no corresponding feature, 
 and to sustain an action as upon an implied contract 
 here, would be to disregard the primary distinctions in 
 the forms of actions." 
 
 In Tuttle vs. Campbell, 74 Mich., 652, the court, by 
 Champlin, J., said: 
 
 "The general rule is that before a party can waive a 
 tort for the conversion of personal property and bring 
 assumpsit the property in the hands of the tort-feasor 
 must have been sold and converted into money, upon the 
 theory that the money has been received for the plaintiff's 
 use. There is, however, another class of cases, where the 
 property has been converted but not sold, where the tort 
 may be waived and assumpsit brought for the value of the
 
 24 
 
 goods converted. This class belongs to those relations 
 where a contract may exist and at the same time a duty 
 is superimposed or arises out of the circumstances sur- 
 rounding or attending the transaction, the violation of 
 which duty would constitute a tort. In such cases the 
 tort may be waived and assumpsit be maintained, for the 
 reason that the relation of the parties, out of which the 
 duty violated grew, had its inception in contract. These 
 relations are usually those of trust and confidence, such 
 as those of agent and principal, attorney and client, or 
 bailee and bailor. When an owner in common of per- 
 sonalty has the exclusive possession of the property he is 
 a bailee of his co-owner ; s share. In such case there is a 
 contract of bailment implied between the parties, the law 
 implying a delivery from the nature of the case and the 
 peculiar rights which one owner in common has to such 
 property when reduced to his possession. He takes it and 
 holds it upon the trust and confidence that he will care 
 for it and use it, if he uses it, in an ordinarily careful 
 manner, and will not sell or convert his co-owner's share 
 to his own use. If he violates this trust and confidence 
 by converting the property to his own use, his co-owner 
 may bring trover for the conversion, or, waiving the tort, 
 may sue in assumpsit to recover its value. This has been 
 the settled law in this state for many years, and was ex- 
 plicitly declared in Piquet vs. Allison, 12 Mich.., 328, which 
 case is decisive of this." 
 
 In Williams vs. Rogers, 110 Mich., 418, 'Montgomery, J., 
 for the court, said : 
 
 "But the right to maintain assumpsit in any case of 
 a conversion by a co-tenant rests upon the fact that the 
 parties maintain contractural relations, and that it is a 
 violation of duty arising out of contract for the co-tenant 
 to convert property, which fact distinguishes the con- 
 version from the case of a conversion by a trespasser, in
 
 which, before assumpsit can be brought by waiving the 
 tort, it must be shown that the property has been con- 
 verted into money or money's worth." 
 
 In Plefka vs. Detroit United Ry., 147 Mich., 641, Mont- 
 gomery, J., for the court, said : 
 
 "There was no contract between the plaintiff and de- 
 fendant. Can the plaintiff, being entitled to maintain an 
 action on the case to recover these damages, waive the 
 tort and sue in assumpsit? At the common law a party 
 suffering injury through the tortious wrong of another 
 could waive the tort, and sue in assumpsit only in case the 
 tort arose out of contract relations between the parties 
 or the tort consisted of a conversion of plaintiff's prop- 
 erty into money or money's worth" (Watson vs. Stever, 
 25 Mich., 386; Tuttle vs. Campbell, 74 Mich., 652; Wil- 
 liams vs. Rogers, 110 Mich., 418). 
 
 CONTRACTS IMPLIED BY LAW WHERE THERE 
 ARE NO ACTUAL CONTRACTS. 
 
 Quasi-contractsi or contracts implied by law are those 
 where the plaintiff can waive the tort and sue in as- 
 sumpsit, although there is no possible ground for reach- 
 ing the conclusion that the defendant entered into an 
 actual contract, his tortious act showing a clear intent 
 to the contrary. The law imposes the obligation be- 
 cause it enforces honesty, morality and justice ; it assumes 
 that every person agrees to observe the rules essential to 
 the existence of civilized society, and to the enjoyment 
 by all of the protection of organized* government, and 
 that a member of society and a party to the social com- 
 pact cannot avoid his obligations by a breach of them 
 no matter how tortious. Waiving the tort and suing in
 
 26 
 
 assumpsit may be a fiction, but if so, it is a fiction 
 founded in common sense and reason. 
 
 In Lamine vs. Dorrell, 2 Ld. Raymond, 1216, decided 
 in 1705, the defendant pretending to a right to be admin- 
 istrator, got administration granted to him, and by that 
 means got certain debentures into his hands and sold 
 them; then his administration was repealed, and admin- 
 istration granted to the plaintiff, who sued the defendant 
 in indebitatus assumpsit for money received by the de- 
 fendant to the use of the plaintiff as administrator. It 
 was objected that assumpsit would not lie because the 
 defendant sold the debentures as one that claimed a title 
 and interest in them, and therefore could not be said 
 to receive the money for the use of the plaintiff, which 
 indeed he received to his own use. 
 
 Held, that assumpsit would lie. 
 
 "Powell, Justice. It is clear the plaintiff might have 
 maintained detinue or trover for the debentures; but 
 when the act that is done is in its nature tortious, it is 
 hard to turn that into a contract, and against the reason 
 of assumpsits. But the plaintiff may dispense with the 
 wrong, and suppose the sale made by his consent, and 
 bring an action for the money they were sold for, as 
 money received to his use. It has been carried thus far 
 already. Howard and Wood's case, 2 Lev., 245; Sir T. 
 Jones, 126, is as far; there the title of the office was 
 tried in an action for the profits. 
 
 "Holt, chief justice: These actions have crept in by 
 degrees. I remember, in the case of Mr. Aston, in a dis- 
 pute about the title to the office of clerk of the papers in 
 this court, there were -great counsel consulted with; and 
 Sir William Jones and Mr. Saunders were of opinion, 
 an indebitatus assumpsit would not lie, upon meeting 
 and conferring together, and great consideration. If
 
 27 
 
 two men reckon together, and one overpays the other, 
 the proper remedy in that case is a special action for the 
 money overpaid, or an account; and yet in that case you 
 constantly bring an indebitatus assumpsit for money 
 had and received to the plaintiff's use. Suppose a per- 
 son pretends to be guardian in socage, and enters into 
 the land of the infant, and takes profits, though he is not 
 rightful guardian, yet an action of account will lie 
 against him. So the defendant in this case pretending 
 to reecive the money the debentures were sold for in the 
 right of the intestate, why should he not be answerable 
 for it to the intestate's administrator?" 
 
 "And Holt said, that he could not see how it differed 
 from an indebitatus assumpsit for the profits of an office 
 by a rightful officer against a wrongful, as money had 
 and received by the wrongful officer to the use of the 
 rightful." 
 
 Welch vs. Begg, 12 Mich. 41, is a case where the plain- 
 tiff sued the defendant in assumpsit for pasturing cattle 
 on his land. 
 
 Manning, J., with the concurrence of Martin, C. J., 
 said that if defendant pastured cattle on the plaintiff's 
 land "without plaintiff's consent he was a trespasser, 
 and the plaintiff might sue him in trespass, or waive the 
 trespass and sue him in assumpsit, as he has done, for 
 pasturing his cattle." 
 
 In Bowen vs. School District, 36 Mich. 149, the defend- 
 ant wrongfully procured a district order. The court said : 
 
 
 "It is objected that an action of tort should have been 
 
 brought and not assumpsit. But as the defendant made 
 use of the order as money, the law will raise an implied 
 promise to pay the amount. The district perhaps might 
 have sued in tort, but was not compelable to do so."
 
 28 
 
 Followed in a case where a supervisor converted town- 
 ship orders to his own use. (Buckeye vs. Cook, 90 Mich. 
 432.) 
 
 The foregoing review of the law of implied contracts 
 as actually enforced by the courts, makes it perfectly 
 plain, that on any view that can be taken of the case 
 the Detroit United Railway has a legal right to continue 
 the service it renders the public, beyond the period of 
 thirty years, expiring November 14, 1909. 
 
 1. On the general principle of the law of implied con- 
 tracts, that it will be presumed that a party to an ex- 
 press contract, impliedly agrees to do that which under 
 all the facts and circumstances, he ought to do, and 
 which he would have expressly agreed to do, if his at- 
 tention had been called to it. 
 
 2. On the principle of the law of implied contracts, 
 that if contractual relations exist between the parties, 
 and these relations are coupled with a duty imposed 
 by law, then a contract to perform that duty will be im- 
 plied. 
 
 3. On the principle of the law of quasi contracts, that 
 where reason, justice, and the protection of society de- 
 mands it, the law will imply an obligation, even in the 
 absence of any actual implied contract, and directly con- 
 trary to the intention of the party as indicated by his 
 words or conduct. 
 
 On the facts and surrounding circumstances as they 
 existed at the time the existing contracts between the 
 Detroit United Railway and the City of Detroit, were 
 entered into, there is ample room to hold that both par- 
 tiesi understood and agreed that the company should 
 continue, and the city should permit the company to con-
 
 29 
 
 tinue, the service beyond the period of thirty years, on 
 the old 1 terms and conditions and rates of fare, or on 
 such as the law imposes. There can be no doubt about 
 this, when it is remembered and considered, that the 
 contractual relations existing between the parties, are 
 coupled with a duty imposed by the law on both of them, 
 to serve the general public. 
 
 Going a step further, it may be truthfully asserted 
 that the demands and requirements of the public service, 
 are such that although it is held, that the Detroit United 
 Railway is under an implied contract to stop the oper- 
 ation of the cars and surrender the streets on November 
 14, 1909, yet, the rights of the general public, consisting 
 of all the people of the State of Michigan, and their visi- 
 tors from other states and countries, are of such para- 
 mount importance, that the local contract must give 
 way, and yield to the superior right. 
 
 If it had been expressly stipulated that at the end 
 of the thirty years, the street railway company must ac- 
 cept such rates of fare as the city might dictate, whether 
 reasonable or unreasonable, or remove from the streets, 
 the fact that the contract was accepted by the company, 
 would not prevent the courts from rejecting the stipula- 
 tion as unreasonable, and therefore, illegal, void and 
 non-enforceable. 
 
 That is just what was done in the natural gas com- 
 pany case of Pittsburgh Appeal, 115 Pa. St. 4, and in 
 the exclusive privilege case of Citizens' 1 Street Ry. Co. vs. 
 Detroit Ry., 171 U. S. 48. 
 
 But I am getting ahead of my argument. I only men- 
 tion these subjects here to show that the implied t-mi- 
 tract contended for, is a necessary implication, as all
 
 30 
 
 contracting parties are presumed to have contracted with 
 knowledge of the law, and subject to its requirements. 
 
 An implied covenant on the part of the City of De- 
 troit that it would not prevent the Detroit City Railway, 
 its successors and assigns, from continuing beyond the 
 period of thirty years the service the street railways 
 render the public, is much more in accord with the facts 
 of the case and the law applicable thereto, than an im- 
 plied covenant on the part of the company that at the 
 end of the thirty years it would cease operating its rail- 
 ways, and would remove the tracks and other structures 
 from the streets. 
 
 Any such surrender by the company would be a public 
 disaster. New street railways could not be built and 
 put in operation for many months; and when we give 
 due consideration to the legal obligation of the company 
 to continue to serve the public, and to the legal obliga- 
 tion of the city as trustee for the general public, to pro- 
 tect and improve its streets so as to make them conven- 
 ient and useful, the conclusion is inevitable that the city 
 must have contracted with a full recognition of its own 
 and the company's obligation, and that the company 
 has a right to remain in the street beyond the thirty 
 years. 
 
 This implied right might be considered strong enough 
 to mean that all the terms and conditions of the original 
 contracts would be continued in force, but. it is not neces- 
 sary to go that far. An argument which proves too 
 much does not prove anything. 
 
 Iv may well be held that the agreement fixing the 
 rates of fare expires at the end of the thirty years, and 
 that thereafter the company will be subject to its com-
 
 31 
 
 mon law obligation to carry passengers for reasonable 
 fares. Agreements fixing rates of fare are not intended 
 to authorize unreasonable fares, but are a means of de- 
 termining as between the company and the public what 
 is to be regarded as reasonable. When any such agree- 
 ment expires by its own limitation, the street railway 
 company is not authorized to charge any fare it sees 
 fit, but as a common carrier it becomes subject to the 
 rule which has prevailed for centuries, that a common 
 carrier is only entitled to reasonable compensation for 
 his services. 
 
 There is no reason why we should doubt the -rule of 
 construction laid down by Blackstone and Chief Justice 
 Marshall that the law presumes "that every man hath 
 engaged to perform what his duty and justice requires,'- 
 and that contracting "parties are supposed to have made 
 stipulations they ought to have made." 
 
 The cases I have cited on the subject of implied con- 
 tracts show that the courts are constantly restorting to 
 implied contracts and reaching the conclusion that they 
 exist whenever required by fair dealing, justice and 
 equity. Without such implications it would be almost 
 impossible to conduct the ordinary affairs of life or to 
 carry on business. No lawyer or other scrivener could 
 put every desire or thought of the contracting parties in 
 express words or anticipate every possible contingency 
 that might arise in the execution of their contract; and 
 the whole mass of implied contracts arising from con- 
 tract relations and duties imposed by law, as well as 
 those imposed by the law where there are no actual con- 
 tracts would have to be eliminated from the books of 
 the law.
 
 32 
 
 Public service corporations would be released from all 
 duties and obligations except those expressly imposed 
 by statutes, and the whole body of statutory law relating 
 to corporations would have to be revised, reformed and 
 very greatly enlarged. Our whole system of jurispru- 
 dence, which is the principal reliance and protection of 
 organized society, would be disturbed and rendered use- 
 less.
 
 33 
 
 II. 
 
 The Detroit United Railway is under an obligation 
 to the State of Michigan, from which it received its 
 corporate franchises, to operate its street railways for 
 the public use, during the entire period for which the 
 company was incorporated, and at or before its ex- 
 piration, to reorganize itself or to turn the property 
 over to another company, to continue the service it 
 renders the public. 
 
 It is impossible to escape the conviction that street 
 railways and other public utilities, are at their incep- 
 tion, intended to be permanent public improvements, and 
 not mere temporary affairs. In 1862 and 1863 and again 
 in 1879, everybody in the city of Detroit believed and 
 knew that in thirty years, the population of the city 
 would be very greatly increased, and that the importance 
 of the street railways, as a public convenience would 
 steadily increase year by year. If an express stipula- 
 tion, that at the end of the term, the tracks should be 
 taken out of the streets, and the service stopped, even 
 for the length of time it would take to build new street 
 railways, it would have been laughed at as absurd, and 
 some provision would have been found to prevent any 
 such thing. 
 
 Every public corporation, accepting the franchises 
 granted to it by the state either under a special charter 
 or a general law, impliedly agrees to perform the ser- 
 vice for which it is incorporated. If it does not do so, 
 the public has two remedies, which depend somewhat on 
 the circumstances surrounding each case. The state can 
 enforce a forfeiture of the franchises by quo warranto.
 
 f I 
 
 34 
 
 or it can compel the company by mandamus to perform 
 its contract. 
 
 This is well illustrated by a case in New York. (Peo- 
 ple vs. Albany & Vermont Railroad, 24 N. Y. 261). The 
 railroad company was engaged in taking up and remov- 
 ing its railroad on twenty-one miles of its route, when 
 the attorney general commenced a suit for an injunction 
 and specific performance of the alleged contract of the 
 company to maintain and operate its railroad for its 
 entire length. 
 
 Wright, J., examining the terms of the charter of the 
 company came to the conclusion that the charter did not 
 impose any obligation on the part of the company to 
 exercise its franchises when against its own interests. 
 One of the six judges siting in the case agreed with him. 
 All of them agreed that it was not a case for the equity 
 jurisdiction of the courts. Four of them, "however, were 
 of the opinion that a corporation is under a legal obliga- 
 tion to exercise its franchises, and that it has not the 
 option to discontinue a part of its road and forfeit its 
 franchises. They agreed that the remedy is not by ac- 
 tion in equity for a specific performance but by man- 
 damus or indictment, or at the election of the people 
 by proceeding to annul the existence of the corporation.'' 
 
 In another case in New York, a mandamus was or- 
 dered to be issued to compel the New York Central Rail- 
 road Company, to forthwith resume the discharge of their 
 duties as common carriers and the exercise of their fran- 
 chise by promptly receiving, transporting and delivering 
 all such freight or other property as might be offered to 
 them for transportation at their stations in and to the 
 city of New York upon the usual and reasonable terms 
 and charges. (People vs. N. Y. C>, 28 Hun. 543).
 
 35 
 
 The court cited a large number of cases in which writs 
 of mandamus had been issued against railroad companies, 
 and then said: 
 
 "These are all express or implied obligations arising 
 from the charters of the railroad companies, but not 
 more so than the duty to carry freight and passengers. 
 That duty is, indeed, the ultima ratio of their existence; 
 the great and sole public good for the attainment and 
 accomplishment of which all the other powers and duties 
 are given or imposed. It is strangely illogical to assert 
 that the state, through the courts, may compel the per- 
 formance of every step necessary to bring a corporation 
 into a condition of readiness to do the very thing for 
 which it is created, but is then powerless to compel the 
 doing of the thing itself. 
 
 "We cannot bring our minds to entertain a doubt that 
 a railroad corporation is compellable by mandamus to 
 exercise its duties as a carrier of freight and passen- 
 gers; and that the power so to compel it rests equally 
 firmly on the ground that that duty is a public trust, 
 which having been conferred by the state and accepted 
 by the corporation may be enforced for the public bene- 
 fit; and also upon the contract between the corporation 
 and the State, expressed in its charter or implied by the 
 acceptance of the franchise (Abbott vs. Johnstone R. R. 
 Co., 80 N. Y. 31) ; also upon the ground that the com- 
 mon right of all the people to travel and carry upon 
 every public highway of the state has been changed in 
 the special instance, by the legislature for adequate rea- 
 sons into a corporate franchise, to be exercised solely by 
 a corporate body for the public benefit, to the exclusion 
 of all other persons, whereby it has become the duty 
 of the state to see to it that the franchise so put in trust 
 be faithfully administered by the trustee."
 
 36 
 
 In the case cited, the court, 80 3T. Y. 31, said: 
 
 "The legislature conferred upon the defendant corpor- 
 ation a corporate existence to carry on the business of 
 common carriers, and its obligation to properly discharge 
 the duties of that position is as binding and operative 
 <7.s- // specified in the act" 
 
 Bridgeton vs. Traction Co., 62 N. J. L. 592, is a cast' 
 where it appeared that the tracks of the traction com- 
 pany passed over a bridge which was not in the control 
 of the municipality but in that of the board of chosen 
 freeholders of the county. The traction company en- 
 gaged in a controversy with the board of chosen free- 
 holders over the use of the bridge, and ceased to operate 
 its cars on the west side of the stream. The city ap- 
 plied for a mandamus and the writ was granted. 
 
 The court, at page 600, said: 
 
 "It became the duty of the respondent company to 
 operate the railway over its entire route under the fran- 
 chises as acquired by it. Its exercise of franchise in the 
 operation of its railway upon this street was exclusive, 
 and it was its duty to construct, maintain and operate 
 a railway on the surface of the street to carry passengers 
 and demand tolls, and that was in so far exclusive that 
 others could not use the road without the grant of the 
 legislature, nor exercise that same or similar franchise 
 upon that street without such grant. Citizens' Coach Co. 
 vs. Camden Horse Railroad Co., 6 Stew. Eq. 267, 279. 
 
 "In Messenger et al vs. Pennsylvania Railroad Co., 7 
 Vroom., 407, Chief Justice Beasley, speaking of the duties 
 of a common carrier in a case involving a contract creat- 
 ing illegal preferences, on page 410, says: 
 
 " 'A person having a public duty to discharge, is un-
 
 37 
 
 doubtedly bound to exercise such office for the equal 
 benefit of all.' Again, 'A company of this kind is in- 
 vested with important prerogative franchises, among 
 which are the rights to build and use the railway, and to 
 charge and take tolls and fares. These prerogatives are 
 grants from the government, and public utility is the 
 consideration for them.' Again, he says, 'It cannot be 
 supposed that it was the legislative intention, when such 
 privileges were given, that they were to be used as pri- 
 vate property at the discretion of the recipient, but, to 
 the contrary of this, I think an implied condition at- 
 taches to such grants, that they are to be held as a quasi 
 public trust for the benefit at least to a considerable 
 degree, of the entire community. In their very nature 
 and constitution, as I view this question, these com- 
 panies become, in certain aspects, quasi public agents/ 
 "The grant being exclusive they must be held to a 
 good faith in the performance and fulfillment of their 
 duties. I cannot perceive any excuse whatever by which 
 the respondent company can be permitted to abandon 
 the operation of any part of it. That a portion is un- 
 profitable or that a portion is more difficult to operate, 
 are not valid reasons for abandonment. Its application 
 to the city was for the location of its tracks over the 
 whole route. The terms and conditions of the ordinance, 
 and the ordinance passed on the faith of the duty of 
 the company, were to operate its road over the entire 
 route located. In view of this ordinance it must be 
 conclusively said that if one part was to be operated 
 and that another part might be abandoned at the dis- 
 cretion of the company, the terms and conditions of the 
 ordinance would have been different. This must be con- 
 clusively assumed in a case of this character. It ap- 
 pears clear from the statute and the ordinance that it 
 is the duty of such company organized under the statutes
 
 38 
 
 to operate the roads mentioned in its certificate of in- 
 corporation for the benefit of the public, in consideration 
 that it shall have the franchise of transporting the pas- 
 sengers and taking the tolls from them, and that it can- 
 not escape the performance of this duty as a public 
 agent." 
 
 Speaking of the contract existing between the state 
 and a railroad corporation created by it, Mr. Justice 
 Brewer for the court, in Reagan, vs. Farmers' Loan & 
 Trust Co., 154 U. 8. 362, 393, said: 
 
 "Obviously, one obligation assumed by the corporation 
 was to construct and operate a railroad between the 
 termini named; and on the other hand one obligation as- 
 sumed by the state was that it would riot prevent the 
 company from so constructing and operating the road.'' 
 
 The same learned justice delivering the opinion of the 
 court in Missouri Pacific Railway Co. vs. Larabee Flour 
 Mills Co., 211 U. S. 612, held that even in the absence 
 of legislative enactment, the order of a commission or 
 other administrative board, or special contract, a rail- 
 road company as a common carrier, can be compelled 
 by mandamus to perform its common law duty to treat 
 all shippers alike. He said: 
 
 "Coming directly to that, counsel for plaintiff in error 
 contend that no duty was imposed on the railroad com- 
 pany by act of the legislature or mandate of commission 
 or other administrative board. Conceding this, it is also 
 true that the Missouri Pacific was a common carrier, 
 and as such was engaged in the work of transferring 
 cars from the Santa Fe track to the mill company, and 
 after this controversy arose continued like transfer for 
 all industries located on the Missouri Pacific at Stafford,
 
 39 
 
 except the mill company. While no one can be com- 
 pelled to engage in the business of a common carrier, 
 jet when he does so, certain duties are imposed which 
 can be enforced by mandamus or other suitable remedy. 
 The Missouri Pacific engaged in the business of transfer- 
 ring cars from the Santa Fe track to industries located 
 at Stafford, and continued to do so for all parties except 
 the mill company. So long as it engaged in such trans- 
 fer it was bound to treat all industries at Stafford alike, 
 and could not refuse to do for one that which it was 
 doing for others. No legislative enactment, no special 
 mandate from any commission, or other administrative 
 board was necessary, for the duty arose from the fact 
 that it was a common carrier. This lies at the founda- 
 tion of the law of common carriers. Whenever one en- 
 gages in that business the obligation of equal service 
 to all arises, and that obligation, irrespective of legisla- 
 tive action or special mandate, can be enforced by the 
 courts." 
 
 In Thomas vs. West Jersey R. R. Co., 101 U. 8. 71, 
 the court in an opinion by Justice Miller, said : 
 
 "That principle is, that where a corporation, like a 
 railroad company, has granted to it by charter a fran- 
 chise intended in large measure to be exercised for the 
 public good, the due performance of those functions be- 
 ing the consideration of the public grant, any contract 
 which disables the corporation from performing those 
 functions which undertakes, without the consent of the 
 state, to transfer to others the rights and powers con- 
 ferred by the charter, and to relieve the grantees of the 
 burden which it imposes, is a violation of the contract 
 with the state, and is void as against public policy. This 
 doctrine is asserted with remarkable clearness in the
 
 40 
 
 opinion of this court, delivered by Mr. Justice Campbell, 
 in the case of R. R. Co. vs. Winans, 17 Hoiv. 30." 
 
 In the case cited the court said : 
 
 "Important franchises were conferred upon the cor- 
 poration to enable it to provide the facilities to communi- 
 cation and intercourse, required for the public conven- 
 ience. Corporate management and control over these 
 were prescribed, and corporate responsibility for their 
 insufficiency provided, as a remuneration to the commun- 
 ity for their grant. The corporation cannot absolve itself 
 from the performance of its obligations, without the con- 
 sent of the legislature. (Beman vs. Rufford, 1 Simon, 
 N. 8. 550; Winch vs. B. & L. Railway Co., 13 L. & E. 
 506." 
 
 The two foregoing cases were cited approvingly in 
 Central Transportation Co. vs. Pullman Palace Car Co., 
 139 U. 8. 24. 
 
 In Union Pacific Ry. Co. vs. Chicago., Etc., Ry. Co., 
 163 U. 8. 564, 581, the court said': 
 
 "The general rule is that a contract by which a rail- 
 road company renders itself incapable of performing its 
 duties to the public or attempts to absolve itself from 
 those obligations without the consent of the state, or a 
 contract made by a corporation beyond the scope of its 
 powers, express or implied, on a proper construction of 
 its charter, cannot be enforced, or rendered enforceable 
 by the application of the doctine of estoppel. Thomas 
 vs. Railroad Co., 101 U. 8. 71; Central Transportation 
 Co. vs. Pullman Car Co., 139 U. 8. 24." 
 
 State vs. Hartford & New Haven R. R. Co., 29 Conn. 
 538, is a case where a railroad company discontinued
 
 41 
 
 the running of passenger ears over a portion of its road 
 terminating at tide water. The object of the company 
 was to divert passenger traffic from a steamboat line run- 
 ning from the terminus to New York. 
 
 Held, that mandamus should issue to compel the com- 
 pany to restore the passenger service. 
 
 The court said: 
 
 "We forbear going into other questions raised on the 
 trial, or commenting on the authorities cited by counsel. 
 We think it unnecessary, and prefer to place our deci- 
 sion upon the simple ground of the corporate duty of the 
 respondents. All jurists and judges will at once agree 
 that chartered companies are obliged fairly and fully to 
 carry out the objects for which they are created, and 
 that they can be compelled by mandamus to do it; and 
 it will not be questioned that in the case of public high- 
 ways, whether turnpikes or railroads, they are bound to 
 keep them fit for use, and, in the case of railroads, to 
 keep them furnished with suitable cars, engines and at- 
 tendants, without which they can not be used at all." 
 
 Gates vs. Boston & New York Air Line R. R. Co., 53 
 (Jonn. 333, is a case where a mortgage on a railroad was 
 foreclosed, and the legislature authorized the bond hold- 
 ers by a vote of the majority, to reorganize as a new cor- 
 poration with the rights of the old corporation. A min- 
 ority stockholder objected but it was held, that where a 
 company has taken private property and constructed its 
 road, it has come under an obligation to carry into 
 effect the objects of its charter and its capital stock fran- 
 chises and property stand charged primarily with this 
 public trust; and that the legislature could authorize a 
 majority of the bond holders to reorganize the corpora-
 
 42 
 
 tion, because that was a proper means of securing the 
 performance of the paramount public trust. 
 
 The court, at page 34, said : 
 
 "The broad claim is now made by the plaintiff, that, 
 as he was not personally a party to the re-organization 
 scheme, had no actual notice of it, and has not assented 
 that his bonds should mature and the trustee be dis- 
 charged, therefore his bonds with their coupons are out- 
 standing subsisting obligations of the old corporation, 
 charged upon this railroad property, and that either by 
 an absolute sale, or by operation of the railroad by the 
 trustee, said property and franchises must be appro- 
 priated to the discharge of the obligations held by him, 
 notwithstanding that a different mode of appropriating 
 the property in liquidation of the bonds has been agreed 
 upon by a majority of his co-bondholders, and has been 
 sanctioned by the state and by a court of equity having 
 jurisdiction of the subject matter. 
 
 "The plaintiff's contention in this behalf rests upon 
 his assumption that he has a constitutional property right 
 to have the property appropriated in the manner claimed 
 by him. 
 
 "In making this claim the plaintiff ignores, or subor- 
 dinates to his own claim, both the private rights of his 
 co-bondholders and public rights vested in trust in the 
 state, while upon every true theory and exposition of 
 his contract the rights of the public are superior to his 
 private rights, and the rights and interests of his co- 
 bondholders are equally with his own to be protected by 
 the law. The plaintiff's argument treats this matter as 
 one of strict legal private right of an individual creditor, 
 against or to private property of an individual debtor, 
 instead of a claim of exceptional character upon property 
 of peculiar nature, in which private rights of others and
 
 43 
 
 the right of the public exist, which must be regarded 
 and protected. 
 
 "One public right consists in the continuous uses of 
 the railroad, its franchises and corporate property, in 
 the manner and for the purposes contemplated by' the 
 terms of the charter. All these corporate franchises and 
 this property are held subject to, and charged with, this 
 obligation. 
 
 "It is true that the charter is permissive in its terms, 
 and probably no obligation rests upon the corporation 
 to construct the railroad; the option to exercise the 
 right of eminent domain and other public rights is grant- 
 ed. And when that option has been made, and the cor- 
 poration has located and constructed its line of tracks, 
 exercising the power of the state in taking property of 
 others, and in so locating and constructing its road, has 
 invited and obtained subscriptions upon the implied 
 promise to construct and operate its road, has com- 
 menced to operate the road under the granted 1 powers, 
 thereby inducing the public to rely, in their personal and 
 business relations, upon that state of affairs; by so ac- 
 cepting and acting upon the chartered powers a contract 
 exists to carry into full effect the objects of the charter, 
 and the capital stock, franchises and property of the 
 corporation stand charged primarily with this trust. 
 The large sovereign powers given by the state to railroad 
 corporations are granted and exercised only upon the 
 theory that these public rights are to be used to promote 
 the general welfare. Having exercised those powers, 
 the corporation has no right against the will of the state 
 to abandon the enterprise, tear up its track, and sell 
 its rolling stock and other property, and divide the pro- 
 ceeds among the stockholders." 
 
 "The possible effects of the exercise of such a claimed 
 power are utter disaster to the great interests of the
 
 44 
 
 state, certain destruction of private property in which 
 whole communities created and existing upon the faith 
 of the continuous use of the chartered powers are inter- 
 ested, and, indeed, the life of the citizen as well as his 
 property rights are thus jeopardized. Upon principle it 
 would, seem plain that railroad property once devoted 
 and essential to public use, must remain pledged to that 
 use, so as to carry to full completion the purpose of its 
 creation; and that this public right, existing by reason 
 of the public exigency, demanded by the occasion, and 
 created by the exercise by a private person of the powers 
 of a state, is superior to the property rights of corpor- 
 ations, stockholders and bondholders." 
 
 In State vs. Spokane Street Ry, Co., 19 Wash. 518, the 
 court in a carefully considered opinion, by Reavis, J., 
 reviewed the authorities, and held : 
 
 (1.) Where a street railway company attempts to dis- 
 continue the operation of a line, after acquiring the right 
 and commencing the performance of the service, its duty 
 to continue the operation of the railway may be enforced 
 by mandamus. 
 
 (2.) A street railway company which has occupied 
 public highways for several years in the operation of its 
 line without a grant or privilege or franchise from the 
 municipality, cannot urge that objection for the purpose 
 of relief against its enforced continuance to operate its 
 line thereon, when its use and occupation of such high- 
 ways has been undisturbed. 
 
 (3.) A street railway company which receives its 
 franchises from the state and enters upon the enjoyment 
 of them cannot cease to perform the functions which
 
 45 
 
 were the consideration for the grant of such f ranch isos 
 without the consent of the granting power. 
 
 In New York an electric surface street railway is re- 
 garded as an additional burden on the street, and be- 
 before a street railway company can occupy a street, it 
 must have the consent of the abutting owners, as well 
 as that of the municipality. The franchises of the com- 
 pany are derived from the state. 
 
 Paige vs. Schenectady Ry. Co., 178 N. Y. 102, is a 
 case where a receiver of a street railway company in a 
 mortgage foreclosure suit, took up and abandoned the 
 street railway on Washington avenue in Schenectady. 
 He did this with the consent of the common council of 
 the city, and a portion of the abutting owners who had 
 consented to the original construction of the road, but 
 without the consent of the company or its stockholders, 
 and without the consent of the state. 
 
 The purchaser at the foreclosure sale sought to re- 
 build the road. 
 
 Held: 
 
 (1) That the receiver had no authority to abandon 
 the road, "without the consent of the company, of the 
 stockholders and the consent of the legislature of the 
 state." 
 
 (2) "Nor was the common council clothed with any 
 authority to compel or to authorize an abandonment of 
 any portion of such street railway. While its consent 
 might possibly waive any right the city possessed to en- 
 force or compel the .enforcement of a continued operation 
 of the road, still it could not by an/y action on its part 
 deprive the railway company of its rights, affect the 
 rights of the stockholders, or the rights of the state and
 
 46 
 
 general public to require the company to continue the 
 maintenance and operation of its railroad as originally 
 constructed." 
 
 (3) "The right to construct and operate a street rail- 
 way is a franchise which must have its source in the 
 sovereign power, and the legislative power over the sub- 
 ject has this limitation, that the franchise must be grant- 
 ed for public and not for private purposes, or at least 
 the grant must be based upon public considerations. It 
 is well settled on the soundest principles of public policy 
 that a contract, by which a railroad company seeks to 
 render itself incapable of performing its duties to the 
 public, or attempts to absolve itself from its obligations 
 without the consent of the state, is void and cannot be 
 rendered enforceable by the doctrine of estoppel, and any 
 contract which disables the corporation from performing 
 its functions without the consent of the state, and to re- 
 lieve the grantees of the burden it imposes, is in viola- 
 tion of the contract with the state, and is void as against 
 public policy. (Fanning vs. Osborne, 102 N. Y. 441; 
 Union Pacific R. Co. vs. Chicago, R. I & P. Ry. Co., 163 
 U. S. 564, 581; State vs. Hartford & N. Haven R. R. Co., 
 29 Conn. 538 ; State vs. S. C. & P. E. R. Co., 7 Neb. 357 ; 
 City of Potwin Place vs. Topeka Ry. Co., 33 Pacific Rep. 
 309; State ex rel. Frinsf elder vs. Spokane St. R. Co., 
 53 Pacific Rep. 710; King vs. Severn & Wye R. Co., 2 B. 
 & Aid. 646.) 
 
 (4) "Within the principle of the cases cited it is 
 obvious that the public had an interest in that portion 
 of the Schenectady street railway which was constructed 
 in Washington avenue, which could not be destroyed or 
 abandoned without the consent of the state, and that the
 
 47 
 
 consent given by the plaintiffs survived the attempted 
 abandonment of the railway upon Washington avenue." 
 
 The Federal court in New York reached the same con- 
 clusion. (Thompson vs. Schenectady, 131 Fed. 577.) 
 
 Potwin Place vs. Topeka Ry. Co., 51 Kan. 609, is a 
 case where a street railway company was compelled by 
 mandamus to operate a street railway which it had aban- 
 doned. 
 
 King vs. Severn & Wye Ry. Co., 2 B. & Aid. 646, is an 
 English case where a railroad company was compelled by 
 mandamus to restore a road it had taken up. 
 
 Speaking of a street railway, Chief Justice Shaw, in 
 Commonwealth vs. Temple, 14 Gray, 69, 76, said: 
 
 "The accommodation of travelers, of all who have oc- 
 casion to use them, at certain rates of fare, is the lead- 
 ing object and public benefit for which these special 
 modes of using the highway are granted and not the 
 profit of the proprietors. The profit to the proprietors 
 is a mere mode of compensating them for the outlay of 
 capital in providing and keeping up this public ease- 
 ment." 
 
 In Fanning vs. Osborne, 102 N. Y. 441, a street rail- 
 way company abandoned a portion of its road, and turned 
 it over to Osborne to use for the passage of freight cars 
 to his manufacturing establishment- 
 Held: 
 
 (1) The right to construct and operate a street rail- 
 way is a franchise which must have its source in the sov- 
 ereign power. 
 
 (2) The legislative power over the subject is subject 
 to the limitation that the franchise must be granted for 
 public, and not for private purposes, or at least public
 
 48 
 
 considerations must enter into every valid grant of a 
 right to appropriate a public street for railroad uses. 
 
 (3) The construction and maintenance of a street 
 railway by any individual or association of individuals, 
 without legislative authority would constitute a public 
 nuisance, and subject the persons maintaining it, not 
 only to indictment, but also to private action, in favor 
 of any person sustaining special injury. 
 
 State vs. Dodge City, etc., Ry. Co., 53 Kan. 377 : The 
 action was by the state for an injunction restraining 
 the railroad company from tearing up and removing the 
 track, ties and iron from that part of the roadbed of the 
 company in Gray county. 
 
 The court said: 
 
 "While the title to a completed railroad is vested in 
 the corporation, it is only private property in a quali- 
 fied sense. Railroads, like all other public thorough- 
 fares, are public instrumentalities. The power to con- 
 struct and maintain railroads is granted to corporations 
 for a public purpose. The right to exercise the very 
 high attributes of sovereignty, the power of eminent do- 
 main and of taxation, to further the construction of 
 railways, could not be granted to aid a purely private 
 enterprise. The railway corporation takes its franchises 
 subject to the burden of a duty to the public to carry out 
 the purpose of the charter. The road, when constructed, 
 becomes a public instrumentality, and the roadbed, sup- 
 erstructure and other permanent property of the corpor- 
 ation are devoted to the public use. From this use 
 neither the corporation itself, nor any person, company 
 or corporation deriving its title by purchase, either at 
 voluntary or judicial sale, can divert it without the
 
 49 
 
 assent of the state. It matters not whether the enter- 
 prise as an investment be profitable or unprofitable, the 
 property may not be destroyed without the sanction of 
 that authority which brought it into existence. Without 
 legislative sanction, railroads could not be constructed. 
 When once constructed, they may only be destroyed with 
 the sanction of the state. The legislature unquestionably 
 has the power to authorize the abandonment of railroads 
 when they cease to be of public utility. It may be, also, 
 that in an action prosecuted by the attorney general, on 
 behalf of the state, to forfeit the charter and wind up the 
 affairs of a railroad corporation, for any proper cause, 
 the court might make all necessary orders for the disposi- 
 tion of the property of the company; but in this case the 
 state appeared, by the county attorney of the county 
 in which the road was located, protesting against the 
 removal of the superstructure of the road. The court 
 erred in refusing the injunction asked. 
 
 "The general propositions stated above are abundantly 
 supported by authority: E. & N. E. Rd. Co. vs. Casey, 
 26 Pa. 287; The State vs. S. C. & T. R. R. Co., 1 Neb. 
 357; People vs. L. & N. Rid. Co., 10 N. E. Rep. (III). 
 657; Railroad Comm'rs vs. P. & 0. C. Rid. Co., 63 Me. 
 269; RaAlway Company vs. Mining Co., 68 III. 489; 
 Gates vs. Railroad Co., 53 Conn. 333; Thomas vs. Rail- 
 road Co., 101 U. 8. 71; Railroad Co. vs. Winans, 17 How. 
 30 ; Pierce vs. Emery, 32 N. H. 484 ; People vs. N. Y. C. 
 d H. R. Rid. Co., 28 Hun. 543. 
 
 "These views are also in accordance with prior de- 
 cisions of this court: Commas of Leavemvorth Co. r.s. 
 Miller, 7 Kas. 479 ; St. J. & D. C. Rid. Co. vs. Ryan, 11 
 id. 603 ; The State ex rel vs. Bridge Co., 22 id. 438 ; City 
 of Potwin Place vs. Topeka Ry. Co., 51 id. 609."
 
 50 
 
 The Supreme Judicial Court of Massachusetts refused 
 to grant a mandamus to compel a street railway com- 
 pany of small capital and limited resources to operate a 
 branch line which was not an integral part of its main 
 system and which did not have sufficient patronage to 
 meet its running expenses. (Selectmen of Amesbury vs. 
 Citizens Electric St. Ry., 199 Mass., 394.) 
 
 The charter held by the company and the laws of the 
 state provided for the approval of the location of street 
 railways by the Board of Aldermen of a city or the Se- 
 lectmen of a town, who, after the expiration of one year 
 from the opening for use of a street railway in their city 
 or town, were authorized to revoke the location, and com- 
 pel the company to remove its tracks and put the street 
 in as good condition as it was in immediately before 
 being occupied by the track. (Public Stat. of Mass. 1882, 
 p. 645, 646). 
 
 The Court based its decision on the precarious nature 
 of the rights of the company in the streets, as the com- 
 pany held "its location upon the public way, without 
 having any estate of its own .in the lands." 
 
 It does not appear by the report of the case whether 
 at the time of making the locations an agreement be- 
 tween the company and the local authorities was entered 
 mto fixing the rate of fare. In the absence of such an 
 agreement the board of directors of the company were 
 authorized to establish the rates of fare, but their action 
 was subject to revision by the board of railroad commis- 
 sioners, on the application of the aldermen or selectmen 
 or fifty legal voters of the city or town ; subject, however, 
 to the restriction that the fares should "not without the 
 consent of the company, be so reduced as to yield, with 
 other profits derived from operating its road, an income 
 of less than ten per cent upon the actual cost of the con-
 
 51 
 
 struction of the road and the purchase of property for 
 its necessary use." (Id. p. 648.) 
 
 The public can have but little interest in a street rail- 
 way that it does not patronize to an extent sufficient to 
 pay operating expenses; and this is an explanation of the 
 reasons which actuated the Court in denying the manda- 
 mus prayed. 
 
 Mr. Walter S. Allen was secretary of the Massachu- 
 setts Special Street Railway 'Commission of 1897, and in 
 his brochure on street railway franchises in Massachu- 
 setts, he said: 
 
 "It may be well here to note the fact that the control 
 of the streets and highways in Massachusetts rests in the 
 Legislature, and that the Courts have repeatedly held 
 that when acting on questions concerning these, the alder- 
 men are not acting as municipal representatives but as 
 the direct servants of the Legislature which has by stat- 
 ute delegated certain of its powers to them." 
 
 Again : 
 
 "As regards the tenure of franchises, the existence of 
 perpetual revokable franchises was seen by the special 
 committee to be an anomaly, but they had worked Avell 
 under Massachusetts conditions, and in practice but two 
 attempts had been made to revoke franchises. In both 
 cases public opinion caused the speedy repeal of the revo- 
 cation order." 
 
 The Massachusetts statutes now provide that if not 
 consented to by the company an order of revocation shall 
 not be valid until approved by the board of railroad com- 
 missioners. (Acts and Resolves of Mass., 1898, Chap. 
 578, Sec. 17; 2 Rev. Laws of Mass., 1902, p. 1051, Sec. 
 32; Id. Sup. 1906, p. 665, Sec. 66.) 
 
 It is also provided that the directors of a street rail- 
 way company may establish rates of fare, and freight,
 
 , 52 
 
 but subject to revision and alteration by the general 
 court (state legislature) or by such officers or persons 
 as it may appoint for that purpose. (2 Rev. Laws of 
 Mass., 1902; p. 1029, Sec. 225; p. 1059, Sec. 73; Id. Sup. 
 of 1906, p. 773, Sec. 96.) 
 
 The course of the legislation which resulted in taking 
 the rates of fare out of the control of the aldermen' and 
 selectmen is shown by the case of Keefe vs. Lexington 
 and Boston Street Railway, 185 Mass.. 183, in which the 
 Court said: 
 
 "Knowlton, C. J. The plaintiff seeks to recover five 
 cents paid under protest for his fare, demanded by the 
 conductor on one of the defendant's cars. The defendant 
 corporation was organized under the laws of this Com- 
 monwealth, after the 'St. 1898, c. 578, went into effect. 
 The selectmen of the town of Concord and the selectmen 
 of the town of Bedford, in granting the defendant a lo- 
 cation in> their respective towns, prescribed conditions 
 as to the fares that might be charged for the transporta- 
 tion of passengers 1 within the limits of the town. The 
 plaintiff contends that the fare charged and collected in 
 his case was in violation of these conditions. The first 
 and most important question before us is whether such a 
 condition could be imposed legally by a board of select- 
 men in granting a location. 
 
 "Under the St., 1898, c. 578, Sec. 13, the board of al- 
 dermen> of a city 'or the 'selectmen of a town, in granting 
 a location to a street railway company, may prescribe 
 the manner in which the "tracks shall be laid, and the 
 kind of rails, poles, wires, and other appliances which 
 shall be used, and they may also impose such other terms, 
 conditions and obligations in addition to those applying 
 to all street railways under the general provisions of law, 
 as the public interest may in their judgment require." 
 The question is whether a condition may be imposed reg-
 
 53 
 
 ulating and restricting the fares to be charged. The stat- 
 ute contains other provisions in regard to fares. By the 
 Pub. Sts. c. 113, Se>c. 43, which was in force when the 
 defendant corporation was organized (R. L. c. 112, Sec. 
 69) the directors of a street railway company "may es- 
 tablish the rates of fare on all passengers and property 
 conveyed or transported in its cars, subject, however, to 
 the limitations named in its charter, or hereinafter set 
 forth." Section 44 provided for a revision and regula- 
 tion of the fares by the railroad commissioners, and Sec. 
 45 provided that nothing contained in the two preceding 
 sections should authorize the company or the board to 
 raise the rate of fare above the rate established by agree- 
 ment, made as a condition of location or otherwise, be- 
 tween the company or its directors and the mayor and 
 aldermen of a city or the selectmen of a town, except by 
 a mutual arrangement with the parties. This section rec- 
 ognized the validity of such agreements under the former 
 statute. But this and the next preceding section were 
 repealed by the St. 1898, c. 578, Sec. 26, leaving the sec- 
 tion as to the authority of the directors to stand with no 
 limitations upon their right. A new section in regard to 
 the revision of the fares by the railroad commissioners 
 was enacted, which is St. 1898, c. 578, Sec. 23. Under 
 this last section, the "fares shall not, without the consent 
 of the company, be reduced below the average rate of fare 
 charged for similar service by other street railway com- 
 panies which, in the judgment of the board of railroad 
 commissioners, are operated under substantially similar 
 conditions." This statute gives to the directors prima- 
 rily the right to fix and regulate fares. It then makes 
 their action subject to revision by the railroad commis- 
 sioners, who are to act, according to the terms of the 
 section, upon broad considerations of public policy. The 
 conditions which may be imposed in granting a location
 
 54 
 
 are of a different character, and do not include those for 
 which special provision is made in other parts of the 
 statute. See Newcomb vs. Norfolk Western Street Rail- 
 way, 179 Mass., 449. With street railways extending long 
 distances and passing through numerous cities and 
 towns, it would be unwise and inexpedient to permit each 
 town to fix the fares within its boundaries, as a condition 
 of granting a location. The purpose of the Legislature to 
 prescribe broad and general provisions for the regulation 
 of fares is further emphasized by the St. 1901, c. 180 (R. 
 L. c. 112, Sec. 73.) Which puts street railways upon 
 precisely the same ground as railroads, as to provisions 
 relative to changes and regulations of their fares. 
 
 "The acceptance by the defendant of the locations 
 granted by these towns did not make valid these condi- 
 tions as to fares which the towns could not legally im- 
 pose, nor did it make a contract as to fares between the 
 corporation and the selectmen, or the town. The defendant 
 might, therefore, at least prescribe for its passengers the 
 payment of any fare which was reasonable. It is not 
 contended that the fare collected of the plaintiff was 
 more than was reasonable, or more than the company 
 was accustomed to collect from other passengers who 
 were traveling as he was. Indeed, it is contended 'by the 
 defendant that it has complied with the terms prescribed 
 by these towns, according to a proper understanding of 
 them, certainly according to its own understanding of 
 them, and that the charge complained of by the plaintiff 
 was for a through passenger, to whom these conditions 
 were not intended to apply. 
 
 "We need not consider this contention particularly, as 
 we deem it unimportant. The plaintiff, in his brief, does 
 not contend that he is entitled to recover, except upon 
 the ground that the conditions imposed as to fares were 
 binding upon the defendant."
 
 55 
 III. 
 
 The streets and highways of the city of Detroit are 
 not the property of the city, or of the inhabitants of 
 the city. They belong to the general public, that is, 
 to the people of the state and their visitors from other 
 states and countries. So far as the municipal authori- 
 ties have been given any title to or power of control 
 over the streets, the same is held in trust for the 
 benefit of the general public; and any ordinance or 
 resolution of the common council which would be 
 detrimental to the general public, would be a breach 
 of the trust, and illegal and void. 
 
 This is universal law in the United States. 
 
 The Michigan town plat law has been in force since 
 1839. (1 C. L. 1897, p. 1038.) 
 
 That act originally vested the fee of the streets in the 
 county; it now vests it in the township, village or city; 
 but it has always provided, that the fee should be held in 
 trust for the public. 
 
 In People vs. Kerr, 27 N. Y., 188, it was held that the 
 title in fee to the streets in the city of New York, was 
 held by the city in trust for the public. 
 
 The Court said: 
 
 "Whatever may be the quantity or the quality of the 
 estate of the city of New York in its streets, that estate 
 is essentially public and not private property, and the 
 city in holding it is the agent and trustee of the public 
 and not a private owner for profit or emolument." 
 
 To same effect: (Glasgow vs. St. Louis, 87 Mo., 678.) 
 
 While the city of New York owns the fee of the lands 
 occupied by the streets of that city, whether laid out 
 under the Dutch regime, during the colonial period, or
 
 56 
 
 after the organization of the state government, its ten- 
 ure is in trust for street uses. (Kane vs. N. Y. E. R. R., 
 125 N. Y., 182.) 
 
 In People vs. Albany, 4 Hun., 675, 679, it was held that 
 the city could sell a ferry property to a bridge company 
 "but property of a public nature such as streets, 
 squares and parks, so long as they are held for the public 
 use, can not be sold. Doubtless the same rule would ap- 
 ply to a ferry franchise if the public were, by its sale, to 
 be shut off from means of intercommunication." 
 
 In Rhinehart vs. Redfield, 93 App. Div. (N. Y.), 410 
 (affirmed 179 N. Y., 569), the common council of Brook- 
 lyn granted to private parties the power to lay pipes in 
 the streets for the conveying of gas generated from am- 
 monia to houses and buildings for the purpose of refrig- 
 eration and it appeared that the grant was made in aid 
 of a private enterprise and not for the convenience of the 
 general public, but for a limited number of people within 
 a limited district. 
 
 Held, that the grant was void as beyond the power of 
 the common council, it being fundamental that a muni- 
 cipal corporation holds its public streets and places in 
 trust for the public. 
 
 Knickerbocker Ice Co. vs. 2nd St. R. R. Co., 176 N. Y., 
 408, 417, involved the title to a pier and the lands occu- 
 pied by it, at Forty-third street and the Hudson river in 
 New York city. 
 
 In disposing of the case the Court said: 
 
 "There are several fundamental facts 1 which must be 
 kept in view in the effort to adjust the rights of the par- 
 ties to this litigation. First. The title of the city of New 
 York in the tideway and the submerged lands of the Hud-
 
 57 
 
 son river granted under the Dongan and Montgomerie 
 charters and the acts of the legislatures of 1807, 1826 
 and 1837, was not absolute and unqualified, but was and 
 is held subject to the right of the public to the use of the 
 river as a water highway. (Sage vs. Mayor, etc., of N. 
 Y., 154 N. Y., 70; Matter of City of New York, 168 N. Y. 
 139.) Second. The title of the city of New York in and 
 to the lands within its public streets is held in trust for 
 public use. (Story vs. N. Y. El. R. R. Co., 90 N. Y., 122; 
 Kane vs. N. Y El. R. R. Co., 125 N. Y-, 165.) Third. The 
 general public has a right of passage over the places 
 where land highways and navigable waters meet; and 
 when a wharf or bulkhead is built at the end of a land 
 highway and into the. adjacent waters, the highway is by 
 operation of law extended by the length of the added 
 structure. (People vs. Lambicr, 5 Denio, 9; Matter of 
 the City of Brooklyn, 73 N. Y., 179.) Fourth. It was 
 competent for the Legislature in granting additional sub- 
 merged lands to the city of New York in 1837, to pre- 
 scribe that such lands should be used for the purposes of 
 an exterior street, to which other streets then intersect- 
 ing the river should be extended." 
 
 In Sweet vs. Buffalo, 79 N. Y-, 293, the city was au- 
 thorized to condemn the fee of lands for the purpose of 
 maintaining a sea wall or breakwater. 
 
 The Court in an opinion by Andrews, J., said: 
 
 "But we perceive no inconsistency in declaring the par- 
 ticular use for which the city is to take and hold the land 
 and at the same time providing that it should take a fee. 
 The particular use declared is in the nature of a trust 
 engrafted on the fee, and the people through its proper 
 officer could compel the city to observe the trust, or re- 
 strain it from any use of the land inconsistent with it."
 
 58 
 
 The Supreme Court of Ohio in Elster vs. Springfield, 
 49 Ohio St., 82, 97, said : 
 
 "The municipality is given the exclusive care, super- 
 vision and control of the streets. Hand in hand with this 
 power goes a corresponding duty to keep them open, in 
 repair, and free from nuisance. This implies a duty to 
 see that the right of the public therein is not encroached 
 upon. An encroachment which would prevent the rea- 
 sonable use of the street by the municipality would be a 
 nuisance, and power to validate such nuisance by a grant 
 would be utterly inconsistent with the duty enjoined to 
 keep the street free from nuisance. 
 
 "As we have seen, the city as to its streets, is a trustee 
 for the use Of the public. A trustee of property for the 
 benefit of the public could not, any more than could a 
 trustee of private property held for known specific and 
 continuing uses, alien or encumber the property to the 
 prejudice of the beneficiary." etc. 
 
 In Gleason vs. Cleveland, 49 Ohio St>, 431, it was held 
 that the donation of the "Public Square" in Cleveland 
 was not made to the city but to the public generally, and 
 the Legislature could authorize the erection of a soldier's 
 monument thereon without the consent of the city. 
 
 The very recent case of Louisville & Nashville Railroad 
 Company vs. City of Cincinnati, 76 Ohio, 481, applies this 
 doctrine to a grant made by the city to the railroad com- 
 pany to build elevated railroad track across a public 
 common or landing. 
 
 At p. 504 the court say : 
 
 "This property was not given to Cincinnati to be used 
 or disposed of as it might determine to be for its best 
 interests, but it was dedicated to the inhabitants of the 
 town, long before the state had an existence, for the pur- 
 poses of a common, and while the legal title now is vest-
 
 59 
 
 ed in the city it is held by the city in trust for the inhab- 
 itants for that purpose, and when the property is no 
 longer desired or the purpose for which it was dedicated 
 attainable, it will revert to the dedicator. Until then, 
 its diversion from that use by the city, or by the legisla- 
 ture, may be prevented by owners of lots whose property 
 rights may be affected and by the city solicitor as the 
 representative of the inhabitants." 
 
 Marine Ins. Co. vs. St. L. etc., Ry. Co., 41 Fed., 643, 
 649, involved the validity of a lease by the municipality 
 of the foot of a street. 
 
 Caldwell, District Judge, said : 
 
 "I have had no difficulty in excluding the lease from 
 the city council. To say nothing about the clause against 
 assignment of the lease, it was plainly ultra vires, and 
 void. The streets of the city do not belong to the coun- 
 cil, but to the public and by that I mean the public at 
 large, and not merely the inhabitants of the city, and 
 to their use they are forever dedicated. The city charter 
 makes it the duty of the city council to keep them open 
 and free from nuisance. It provides that the city coun- 
 cil shall have the care, supervision, and control of all the 
 public highways, bridges, streets, alleys, public squares, 
 and commons within the city; and shall cause the same 
 to be kept open and in repair, and free from nuisance,' 
 See Mansf. Dig., 737. The only legal effect of the lease, 
 it would seem, is to render the city liable for the damages 
 resulting from such a licensed nuisance. Cleveland r.v. 
 King, 132 U. S., 295, 10 Sup. Ct. Rep., 90. It makes no 
 difference that, owing to the declivity at the foot of 'Main 
 street, the street at that point was not commonly fre- 
 quented by vehicles. The requirements of the public as 
 to property set aside for its perpetual use was not a mat- 
 ter to be passed on by the council, and it is plain that,
 
 GO 
 
 by the establishment of a ferry or the building of a bridge 
 at that point, it might at any time become one of tht> 
 most frequented of all the thoroughfares of the city, the 
 expansion and amelioration of which cannot be hindered 
 by leases of the streets by the city council. The law is 
 well settled, as it ought to foe, that all such leases are 
 void. (2 Dill Mun. Corp.,, 660; McDonald vs. Major, (N. 
 J.) 1 Atl. Rep., 855; Harrisburg's Appeal (Pa.), 10 Atl. 
 Rep., 787; Gas Co. vs. Teel, 20 Ind., 131).-' 
 
 Nordhurst vs. Ft. Wayne & 8. W.' Traction Co., 163 
 Ind., 268, is a case where the Supreme 'Court of Indiana 
 examined with care the question whether an interurban 
 electric railway was an additional burden on the high- 
 ways, and in the course of an opinion holding that it was 
 not, said: 
 
 "A street platted or otherwise laid out in a city or 
 town of this state is thereby dedicated to the use of the 
 public, and not exclusively to the use of abutting prop- 
 erty, nor to the convenience or profit of any or all of the 
 inhabitants of the particular municipality. It forms a 
 part of the great system of highways of the state, and its 
 use for inter-communication with other neighborhoods, 
 towns, and cities is one of its most important purposes. 
 In many respects it is governed by the general laws reg- 
 ulating public ways. Discriminations in the terms and 
 conditions on which it could be used in favor of the abut- 
 ting lot owners, the residents on the particular street, or 
 the inhabitants of the city, and * * * against non- 
 residents, could not be tolerated." 
 
 "Kapid and cheap transportation of passengers, light 
 express and mail matter between neighboring towns and 
 cities may be quite as necessary and as largely conducive 
 to the general welfare of the places so connected and 
 their inhabitants as the like conveniences within the 
 town or city."
 
 (il 
 
 A bridge owned by a county is public property and the 
 county is not entitled to compensation if the legislature 
 appropriates it to public use by a turnpike company. 
 (Freeholders of Monmouth Co., vs. Turnpike Co., 18 N. 
 J. Eq., 91). 
 
 In McDonald vs. Neuxvrk, 42 N. J., 136, it was held 
 that the city could not, authorize the use of the streets 
 for the purpose of a market. 
 
 A like ruling was made in Pennsylvania: (City of Har- 
 risburg's Appeal, 10 Atl., 787. 
 
 In Fessler vs. Town of Union, 67 N. J. Eq., 14, 27, the 
 town erected a building on a square devoted to the public 
 use as a park or pleasure ground. 
 
 The court said : 
 
 "If as I hold, the defendant was without authority to 
 erect buildings on the square, then their so doing was a 
 breach, of the trust on which it held the right of posses- 
 sion, and the control of this property; and it is hardly 
 necessary to say that the law ought to be, and is, that a 
 trustee shall not be permitted to gain any advantage or 
 increase his power by a breach of his trust unless it be, 
 and that necessarily to a limited degree, where the 
 breach has been approved and acquiesced in by the cestui 
 que trust" 
 
 Roberts vs. Louisville, 92 Ky., 95, is a case concerning 
 the public wharves owned by the city, and it was held 
 that the city was a mere trustee for the public; that its 
 duties and obligations to the public and individuals could 
 no be ignored or shifted; that the municipality was bound 
 "to maintain and preserve wharf property for the benefit 
 of the public without discrimination or unreasonable 
 charges for individual use;" and that the title of t.lie
 
 62 
 
 city was held "in trust for use of the public and in aid 
 of trade and commerce." 
 
 In Labry vs. Gilmour, 89 8. W., 231, the Court of Ap- 
 peals of Kentucky held that the authorities of a munici- 
 pal corporation hold the public ways of the city in trust 
 for the use of the public and cannot sell or lease them for 
 private use. 
 
 To same effect: Bennett vs. Mt. Vernon, 124 Id-, 537. 
 
 In Dubuque vs. Maloney, 9 la., 450, it was said: 
 "The city, by virtue of its corporate authority, has the 
 power to regulate the public use of the streets and 
 squares and may be regarded as the representative of the 
 public for the purpose of vindicating the public right. 
 But neither the ownership of the soil, nor of the ease- 
 ment is in the corporation." 
 
 In Sherburne vs. Portsmouth, 72 N. H., 539, the court 
 sustained 1 a bill to enjoin the city from making a baseball 
 park on the public common known as the Plains and on 
 the ground that such action would be a breach of trust. 
 
 Speaking of public ways, Elliott on Roads and Streets, 
 2d Ed., Sec. 442, says: 
 
 "The ownership of the easement is exclusively in the 
 public for whom the governmental corporation is trustee, 
 and as such trustee it is in duty bound to protect the 
 rights of the beneficiary." 
 
 In San Francisco vs. Itsell, 80 Cal., 57, it was held 
 that the city of San Francisco holds its public squares 
 in trust for the public and the municipal authorities have 
 no power to dispose of them by way of compromise or in 
 any other manner and the legislature has no power to 
 ratify an ordinance disposing of land srranted to the city 
 to be held in trust for the public.
 
 63 
 
 In Oakland vs. Oakland Water Front Co-, 188 Cal., 
 160, the same doctrine was applied to the title vested in 
 the City of Oakland to the water front of that city. 
 
 Townsend vs. Epstein, 93 Md., 537, 555, is a case where 
 the city had authorized a structure over a street, and 
 seventeen feet above it, to connect the upper stories of 
 buildings on opposite sides of the street. 
 
 The court said: 
 
 "The Corporation, the Mayor and City Council of Bal- 
 timore, is invested with the title to and control over the 
 public streets. This control, however, is not an arbitrary 
 control. The streets and highways are held in trust for 
 the benefit, use, and convenience of the general public. 
 There are many ways in which the power to control and 
 regulate the use of the streets can be and must be exerted 
 by the municipality to meet the necessities and the con- 
 venience of an urban population; but the exertion of this 
 power must have for its object a public purpose. It is 
 not in accord with the trust upon which the municipality 
 holds the streets, nor with the nature of the control which 
 it has over them to make use of the power and authority 
 with which it is invested in that regard to promote a 
 mere private purpose, 1 to subserve a mere private interest 
 or to subordinate the right, of one citizen in the streets, 
 or in a street of the city to the private interest and con- 
 venience of any other." 
 
 In Beebe vs. lAttle Rock, 68 Ark., 39, 68, it was said: 
 
 "It is the duty of a city to open and keep in repair its 
 streets, and it may be compelled to do so by a proper pro- 
 ceeding at the instance of a proper party ; and a city can 
 not divert the grounds given for streets to other uses, but 
 if it does, its unlawful or negligent acts can not divest 
 the cestui que trust the public of title in the streets."
 
 64 
 
 In Simon vs. Northrop, 27 Oreg., 487, it was held that 
 the public highways of a city are not its private property, 
 and hence tie legislature? may transfer their supervision 
 and control to another governmental agency if it does 
 not thereby divert them to a use substantially different 
 from that for which they were originally intended. 
 
 In F. C. & P. R. R. Co. vs. Ocala Street & Suburban, 
 39 Fla., 306, 320, the court said : 
 
 "The correct view is that the powers of a municipal 
 corporation 'in respect to the control of its streets are 
 held in trust for the public benefit, and cannot, unless 
 clearly authorized by a valid legislative enactment, be 
 surrendered or delegated to private parties either cor- 
 porate or natural.' ' 
 
 A city is powerless to confer a right so to use its 
 streets as to hinder or obstruct the concurrent use by 
 the public thereof. ( Chicago, etc., vs. Quincy, 32 III. App. 
 377 ; Dubach vs. Hannibal, etc., 89 Mo. 483. ) 
 
 Action of a city council in vacating a platted' street 
 in order to aid defects in the title of private persons 
 to the land embraced within the streets so as to enable 
 such parties to appropriate and use the street for private 
 purposes is> ultra vires and void. (D eland vs. Dixon 
 Power Co., 225 III, 212.) 
 
 The trust in favor of the public is so strong, that an 
 elevated superstructure for the use of the public, can be 
 built in a street without compensation to abutting lot 
 owners. (Sauer vs. New York, 180 N. Y. 27; Sauer vs. 
 New York, 206 U. S., 536.) 
 
 Abutting property owners may maintain a bill to en- 
 join a city from erecting buildings on a park in violation
 
 65 
 
 of the trust for the general public under which the park 
 is held by the city. (Chicago vs. Ward, 169 III, 392.) 
 
 A city cannot grant the immanent use of a portion of 
 the street for the purposes of an awning over a street en- 
 trance. (Hibbard & Co. vs. Chicago, 173 III., 91.) 
 
 Nor the right to use a well in the public streets. (Sny- 
 der vs. Pulasld, 176 III., 397.) 
 
 Nor the exclusive use of the streets by a railroad com- 
 pany. (Chicago, etc. vs. The People, 222 111., 427.) 
 
 In re Albers Petition, 113 Mich., 640, is a case where 
 the city of Grand Kapids claimed compensation for the 
 value of the land covered by a street which was vacated. 
 
 The court in an opinion by Mr. Justice Hooker, said : 
 
 "Our understanding is that the city has no proprietary 
 interest in the land, all of its authority over it growing 
 out of its legal duty to maintain the public ways which 
 are placed in its charge. (City of Detroit vs. Railway 
 Co., 76 Mich., 421.)" 
 
 In the case cited a street railway grant was involved 
 and the court by Campbell, J., said : 
 
 "The cities in this state have no proprietary interest 
 in city streets as their private property, and, whether the 
 fee is nominally in county, city, or private owners, the 
 public cnotrol is only in trust to secure to the public 
 those rights of a public nature that exist in public ways 
 of that kind. While a considerable discretion is vested 
 in cities concerning the terms of user, and the proper 
 rate to be paid to the city for permitting it, the city sells 
 the roads none of its property, and whatever it exacts 
 must necessarily be by way of tax or license, which is 
 the same thing."
 
 66 
 
 In Fairchild vs. St. Paul,, 46 Minn.,, 540, the court sus- 
 tained a statute authorizing the city to condemn for 
 street a title in fee simple but did so on the ground that 
 the title so acquired would be held in trust for the pub- 
 lic for street purposes ; that the title was not proprietary ; 
 that it was held by the city as an agency of the state; 
 and that the: city could neither sell the land or devote it 
 to a private use. 
 
 In Massachusetts great ponds containing more than ten 
 acres were made public to lie in common for public use, 
 and in West Roxbury vs. Stoddard, 1 Allen 158, it was 
 held that the township had no such property in the 
 ice on Jamaica Pond as would enable it to maintain an 
 action against individuals for trespass in cutting ice 
 therefrom, even if the fee of the pond be considered to 
 be in the town. 
 
 A township does not own the highways within its lim- 
 its. The easement belongs to the public and not to the 
 township. Hence the township cannot maintain an ac- 
 tion for an injury to a highway until it has made repairs 
 and been put to expense in regard thereto. (Freedom vs. 
 Weed, 40Me.,383.) 
 
 In Denver Circle Ry. Co. vs. Nester, 10 Colo., 403, a 
 statute vested the fee of the streets on a recorded plat 
 in the city or town "in trust for the uses there ex- 
 pressed." 
 
 The Court said: 
 
 "The alleged power of the city to authorize the occu- 
 pation of the public street called 'Willow 'Lane' by an 
 ordinary railroad with trains of cars propelled by steam 
 engines, without liability for injuries to property occa- 
 sioned by the construction and operation of the railroad, 
 seems to be based on the proposition that the city, by
 
 67 
 
 virtue of the dedication mentioned, was vested with title 
 to the streets in fee absolute under the statutes then in 
 force. This proposition is defeated by the express words 
 of the statute just cited." 
 
 A resident taxpayer of a municipality has the right to 
 maintain a suit to prevent the unlawful disposition by 
 the municipal authorities of the money or property of 
 the town, and to restrain the diversion of property in his 
 town from any public use, in which he shwes, to which 
 it has been dedicated. 
 
 The Colorado Court of Appeals so held in a case where 
 it was proposed to build a county court house on a public 
 square in Colorado Springs. (Mclntyre vs. El Pa$o 
 County, 15 Colo. App., 78, 88.) 
 
 The most noted case to be found in the books in which 
 the doctrine for which we contend was affirmed and ap- 
 plied is that of Illinois Central R. R. Co. vs. Illinois, 
 146 U. 8. 387. 
 
 In that case the legislature of the state had passed an 
 act granting to the Illinois Central Kailroad Company 
 title in fee to submerged lands in Lake Michigan in front 
 of the city, and a subsequent legislature had repealed the 
 act. 
 
 The court in an opinion by Mr. Justice Field, said: 
 "The question, therefore, to be considered is whether 
 the Legislature was competent to thus deprive the State 
 of its ownership of the submerged lands in the harbor 
 of Chicago, and of the consequent control of its waters; 
 or, in other words, whether the railroad corporation can 
 hold the lands and control the waters by the grant, 
 against any future exercise of power over them by the 
 State.
 
 68 
 
 "That the State holds the title to the lands under the 
 navigable waters of Lake Michigan, within its limits, in 
 the same manner that the State holds titJe to soils under 
 tide water, by the common law, we have already shown, 
 and that title necessarily carries with it control over the 
 waters above them whenever the lands are subjected to 
 use. But it is a title different in character from that 
 which the State holds in lands intended for sale. 
 It is different from the title which the United 
 States hold in the public lands which are open 
 to pre-emption and sale. It is a title held in 
 trust for the people of the State that they may enjoy the 
 navigation of the waters, carry on commerce over them, 
 and have liberty of fishing therein freed from the obstruc- 
 tion or interference of private parties. The interest of 
 the people in the navigation of the waters and in com- 
 merce over them may be improved in many instances by 
 the erection of wharves, docks and piers therein, for 
 which purpose the State may grant parcels of the sub- 
 merged lands; and, so long as their disposition is made 
 for such purposes, no valid objection can be made to 
 the grants. It is grants of parcels of lands under navi- 
 gable waters, that may afford foundation for wharves, 
 piers, docks and other structures in aid of commerce, 
 and grants of parcels which, being ocupied, do not sub- 
 stantially impair the public interest in the lands and 
 water remaining that are chiefly considered and sustained 
 in the adjudged cases as a valid exercise of legislative 
 power consistently with the trust to the public upon 
 which such lands are held by the State. But that is a 
 very different doctrine from the one which would sanc- 
 tion the abdication of the general control of the State 
 over lands under the navigable waters of an entire har- 
 bor or bay, or of a sea or lake. Such abdication is not 
 consistent with the exercise of that trust which requires
 
 69 
 
 the government of the State to preserve such waters for 
 the use of the public. The trust devolving upon the State 
 for the public, and which can only be discharged by the 
 management and control of property in which the public 
 has an interest, cannot be relinquished by a transfer of 
 the property. The control of the State for the purposes 
 of the trust can never be lost, except as to such parcels 
 as are used in promoting the interests of the public 
 therein, or can be disposed of without any substantial 
 impairment of the public interest in the lands and waters 
 remaining. It is only by observing the distinction be- 
 tween a grant of such parcels for the improvement of the 
 public interest, or which when occupied do not substan- 
 tially impair the public interest in the lands and waters 
 remaining, and a grant of the whole property in which 
 the public is interested, that the language of the ad- 
 judged cases can be reconciled. General language some- 
 times found in opinions of the courts, expressive of abso- 
 lute ownership and control by the State of lands under 
 navigable waters, irrespective of any trust as to their 
 use and disposition, must be read and construed with 
 reference to the special facts of the particular cases. A 
 grant of all the lands under the navigable waters of a 
 State has never been adjudged to be within the legisla- 
 tive power; and any attempted grant of the kind would 
 be held, if not absolutely void on its face, as subject to 
 revocation. The State can no more abdicate its trust 
 over property in which the whole people are interested, 
 like navigable waters and soils under them, so as to leave 
 them entirely under the use and control of private par- 
 ties, except in the instance of parcels mentioned for the 
 improvement of the navigation and use of the waters, 
 or when parcels can be disposed of without impairment 
 of the public interest in what remains, than it can abdi- 
 cate its police powers in the administration of govern-
 
 70 
 
 merit and the preservation of the peace In the adminis- 
 tration of government the use of such powers may for a 
 limited period be delegated to a municipality or other 
 body, but there always remains with the State the right 
 to revoke those powers and exercise them in a more direct 
 manner, and one more comformable to its wishes. So 
 with trust connected with public property, or property 
 of a special character, like lands under navigable waters, 
 they cannot be placed entirely beyond the direction and 
 control of the State. 
 
 "The harbor of Chicago is of immense value to the peo- 
 ple of the State of Illinois in the facilities it affords to 
 its vast and constantly increasing commerce; and the 
 idea that its Legislature can deprive the State of control 
 over its beds and waters and place the same in the hands 
 of a private corporation created for a different purpose, 
 one limited to transportation of passengers and freight 
 between distant points and the city, is a proposition that 
 cannot be defended." 
 
 The King of England is the owner of all the navigable 
 waters of the kingdom and of the soil under them, but 
 it is settled law that since Magna Charta, the king 
 holds the title in trust for the public, and grants by 
 the crown in derogation of the public right of navigation 
 and fishing are void. (Martin vs. Waddell, 16 Pet. 367, 
 410 ; Blundale vs. Catterall, 5 Barn. & Aid. 287, 294, 304, 
 309 ; Duke of Somersett vs. Fogwell, 5 Barn & Cress 883, 
 884.) 
 
 And the court of Kings Bench in Williams vs. Wilcox. 
 8 Ad. & El, 314, 333-4, held that such was the law before 
 Magna Charta. 
 
 Attorney General vs. Parmeter, 10 Price 378, affirmed 
 by the House of Lords, 10 Price 412, concerned the val-
 
 71 
 
 idity of a grant made by Chas. I in 1628 of lands between 
 high and low water in the harbor of Portsmouth, and on 
 which the defendants were constructing a dry dock and 
 other works which would interfere with the navigation 
 of the harbor. 
 
 On a bill by the attorney general for an injunction it 
 was held that where a part of the sea coast or shore, 
 being the property to the Crown, and giving jus priva- 
 tum to the king, is granted to a subject for uses, or to 
 be enjoyed so as to be detrimental to the jus publicum 
 therein, such grant is void as to such parts as are open 
 to such objection, if acted upon so as to effect nuisance 
 by working injury to the public right; or it is a grant 
 which does not divest the crown or invest the grantee. 
 
 Eldon, Lord Chancellor, advising the house of lords, 
 said: 
 
 "It is my judgment that on the circumstances now be- 
 fore your lordships there is matter sufficient to put in 
 issue on this record the question of the validity of this 
 grant that looking to these letters patent, with respect 
 to this soil, I am of the opinion that the Court of Ex- 
 chequer have stated a proposition, true in law, that the 
 title is in his majesty." 
 
 There can be no possible doubt about the proposition 
 that the right of the public to pass and repass by vessels 
 or vehicles along all public highways, on water or land, is 
 a paramount right, and all private or local rights are 
 subordinate and inferior. 
 
 The city of Detroit has no more right to stop the pas- 
 sage of street cars along the public streets of the city 
 than it has to stop the passage of other vehicles or of 
 persons.
 
 72 
 
 The common council has no more power to stop the 
 passage of street cars on the streets of the city than it 
 has to stop, within the city limits, the passage of craft 
 on the Detroit river. 
 
 In the recent case of Ainsworth vs. Munoskong Hunt- 
 ing and Fishing Glub, 123 N. W. 802, the Supreme Court 
 of Michigan said: "It is the established law of this state 
 that riparian owners along the Great Lakes own only to 
 the meander line, and that title outside this meander 
 line, subject to the rights of navigation, is held in trust 
 by the state for the use of its citizens. Among these is 
 the common right to fish and hunt."
 
 IV. 
 
 Whatever view may be taken of the original con- 
 tracts between the street railway company and the 
 city, it is certain that under the conditions existing in 
 1909 and 1910, the city has no power at the expira- 
 tion of the thirty years to expell the street railways 
 from the streets of the city. 
 
 The obligation of the city as trustee for the general 
 public to keep the streets in good condition, and open 
 and free for travel and traffic thereon, is a continuing 
 one, and the duty it imposes may vary from time to time, 
 that is to say, what it may do or authorize to be done 
 at one time it may not do or authorize to be done at an- 
 other time. 
 
 This doctrine was declared and enforced by the Sup- 
 reme Court of the United States, in affirming a decision 
 of the Supreme Court of Illinois, in a controversy over 
 a street railway tunnel under the South Branch of the 
 Chicago river at or near Van Buren street in Chicago. 
 (West Chicago R. Co. vs. Chicago, 201 U. 8. 506; 8. C. 
 214 III 9.) 
 
 The South Branch was a navigable stream in Chicago. 
 It was a public highway for the passage of vessels the 
 same as a street is a public highway for the passage 
 of vehicles and persons. The street railway company 
 by permission of the city built a tunnel under the river, 
 with a depth of water above it of seventeen feet, which 
 was sufficient for any craft that could then navigate the 
 river. Some ten years afterwards Congress made an
 
 74 
 
 appropriation to deepen the river so as to have a channel 
 twenty-one feet deep, but provided that the work of 
 removing and constructing bridges and piers and lower- 
 ing tunnels should be done or caused to be done by the 
 city of Chicago without expense to the United States. 
 
 The common council passed an ordinance directing the 
 street railway company to lower its tunnel at its own 
 expense and applied for a mandamus to compel the com- 
 pany to do so. The company contended that the order 
 of the common council impaired its contract with the 
 city, and that as the tunnel was its private property to 
 take it without compensation would deprive the company 
 of its property without due process of law. 
 
 Held: 
 
 (1) That in a navigable stream the public right is 
 paramount and the city was under a continuing duty 
 of protecting the free navigation of the river and its 
 branches. 
 
 (2) That the city could not be exempted from its 
 duty by an agreement it may have made with the rail- 
 road company. 
 
 (3) That the railroad company built the tunnel sub- 
 ject to the duty resting on the city, and to compel 
 it to lower the tunnel at its own expense was not a vio- 
 lation of the due process of law clause of the constitution 
 of the United States. 
 
 Applying these rulings to the case we have in hand, 
 it is plain, that the right of the general public to ride 
 in street cars in the streets of Detroit is paramount and 
 superior to any right possessed either by the municipal- 
 ity or by the street railway company; and if they have
 
 75 
 
 entered into any contracts express or implied, which 
 would destroy or seriously impair the street railways, 
 such contracts whether originally valid or not must give 
 way to the paramount right. 
 
 The common council of the city of Detroit has no 
 more right to stop the operation of the street cars on the 
 streets of the city, November 14, 1909, than it has to 
 build stone walls across the streets and to stop all travel 
 and traffic thereon. 
 
 It is an irrefragable proposition that if the existing 
 contract between the city of Detroit and the Detroit 
 United Eailway contained an express covenant on the 
 part of the company that it would at the expiration of 
 the thirty years, cease to operate its cars and remove 
 the tracks from the streets, or if it is held that there is 
 an implied covenant to make such a surrender, then 
 such covenant, whether express or implied, must be 
 regarded as void and of no force as against the right of 
 the general public to have the street railway service 
 continued beyond the thirty years, without any serious 
 interruption. 
 
 The Supreme Courts of Ohio and Minnesota have each 
 made a practical application of the paramount rlgnt of 
 the general public as affecting the obligations of interur- 
 ban street railways. 
 
 In Townsend vs. City, 78 Ohio 122, the traction com- 
 pany obtained permission of the city of Circleville to 
 construct and operate its railroad along certain streets, 
 and the ordinance granting the permission stipulated 
 "that all cars, excepting special cars, shall stop at cross 
 streets and at street intersections."
 
 76 
 
 After the road was built and in operation the city 
 passed an ordinance making it a penal offense for any 
 conductor of an electric interurban or street car to fail 
 or refuse to stop the car at any street intersection when 
 signaled or requested so to do by any person desiring to 
 board the car or to alight therefrom. 
 
 Without determining what, if any, civil remedies the 
 city might have to enforce the stipulation contained in 
 the ordinance granting permission, the court held that 
 the city had, under the laws of Ohio, no power to en- 
 force it by penal ordinance. In reaching that conclu- 
 sion the court, at page 134, said: 
 
 "If every city and village through which such a rail- 
 way passes may require its cars to be stopped at every 
 street intersection to take on or to discharge passengers, 
 and to serve the purposes of a street railway, then its 
 usefulness as a means of interurban transportation may 
 be very much limited, because so much time will be con- 
 sumed in passing through cities and villages that it 
 will no longer be practicable for many to travel in that 
 way. Councils may reasonably be expected to be actu- 
 ated by considerations of local convenience rather than 
 those of the public and in view of the importance of the 
 subject, and its comparatively recent origin, it would 
 seem to be a matter for consideration by the legislature, 
 and it is in view of these considerations that we reach 
 Hie conclusion that the power has not been conferred ft?/ 
 general terms of Section 28." 
 
 In Village of Excelsior vs. Minneapolis & St. Paul S. 
 Ry. Co., 122 2V. W. 486, the village sought to compel the 
 company by mandamus to obey an ordinance requiring 
 it to stop all cars at street crossings and intersections. 
 The District Court of Hannepin County granted the writ.
 
 77 
 
 The opinion of the Supreme Court state the facts, and 
 that there may be no misunderstanding as to what was 
 decided, I quote it in full. 
 
 "Jaggard, J. On the petition of the village of Excel- 
 sior, the district court issued a writ of mandamus to the 
 defendant and appellant suburban railway company. To 
 an answer and return of the defendant the plaintiff vil- 
 lage demurred on the ground that it did not state facts 
 sufficient to constitute a defense. The demurrer was 
 sustained, with leave to defendant to amend. This ap- 
 peal was taken from the order to that effect. 
 
 "It appeared that defendant was authorized by ordin- 
 ance to operate its lines within the limits of the village 
 under provisions which included the following: 'Sec. 8. 
 Said Minneapolis & St. Paul Suburban Railway Com- 
 pany, its successors and assigns, shall have the right to 
 charge and collect five cents, and no more, for each pas- 
 senger traveling on any of said lines of street railway or 
 parts thereof, within the village limits of the village 
 of Excelsior; provided, however, that the payment of 
 said five cents shall entitle the passenger so paying the 
 same to one continuous ride from any point in the 
 village limits in the village of Excelsior located along 
 any of said lines; provided, however, that no fare shall 
 be required for children under six years of age when 
 traveling with or attended by an adult having paid one 
 full fare.' Subsequently to the construction of defend- 
 ant's lines, the village passed an ordinance which is as 
 follows: 'Any person, company, or corporation driving 
 or propelling, or requiring to be driven or propelled, 
 any raiload car or street car which occupies the public- 
 streets, avenues or alleys of the village of Excelsior for 
 the purpose of operating upon and along same, shall 
 stop such cars at any and all of the intersections or
 
 78 
 
 crossings of streets when any person or persons require 
 to enter or alight from such cars, provided such cross- 
 ings are grade crossings.' It was sought under this or- 
 dinance to compel defendant to stop its cars at a place 
 where its line in plaintiff village was intersected by 
 George street. In point of fact defendant was willin*; 
 to establish a stopping place three-fourths of a mile dis- 
 tant, where its lines divided, and one line passed up 
 Water street. Within the village limits west of this stop- 
 ping place six village streets intersected defendant's 
 tracks. 
 
 "The plaintiff contends that the ordinance requiring 
 defendant to stop at George street was a legitimate ex- 
 ercise of police power. For present purposes it may be 
 conceded that the village council had the authority to 
 pass a proper ordinance in the exercise of such power. 
 Such an ordinance must have reference, however, to pub- 
 lic peace and safety and the good order of persons or 
 agencies upon the streets. Upon the assumption that 
 such power existed, the village had the right to pass 
 reasonable ordinances regulating, inter alia, the speed 
 of traffic and the stoppage of cars. Incidentally such or- 
 dinances would conduce to the convenience and comfort 
 of the community. It by no means follows, however, that 
 an ordinance designed entirely for the comfort and con- 
 venience of the inhabitants is a valid exercise of the 
 police power. The ordinance in question cannot by any 
 reasonable construction be regarded as the result of the 
 exercise of the police power. Under its terms cars are 
 allowed to operate without restriction, except 'when any 
 person or persons require to enter or alight from such 
 cars.' The element of danger to users of the highway 
 is effectually ignored. The right to mandamus based 
 upon the police power must therefore be eliminated.
 
 79 
 
 "The question then arises whether the terms of tin* 
 ordinance applied to the facts in this particular case. 
 The defendant urges that their fair construction com- 
 pels the conclusion that they do not apply. They refer 
 expressly to lines of the defendant which occupy and 
 which are located upon any public street. At the place 
 in question defendant did not occupy a street had not 
 constructed its lines along the street, but on its own 
 right of way. On Water street it had constructed its 
 lines along the street. The mandamus, however, did 
 not purport to affect Water street. It is true that de- 
 fendant's lines crossed streets and alleys; but that fact 
 did not bring defendant within the provisions of the or- 
 dinance, for it was held in Railway Co. vs. Manitou 
 Forest Syn., 101 Minn. 132, 112 N. W. 13, that 'the 
 crossing of streets and alleys, incidental to constructing 
 a railroad from place to place, does not constitute the 
 occupancy of such streets or alleys for the purpose of 
 operating a railway thereon, within the provision of this 
 Section 2841, Rev. Laws 1905, and a railroad company 
 has the right to acquire the right by condemnation, un- 
 der Section 2916, Rev. Laws 1905, a right of way over 
 the streets and alleys of cities and villages and over pri- 
 vate property within such limits, without securing a 
 franchise from the municipal authorities.' There is ob- 
 vious cogency in this argument ; but in view *of the great 
 importance of the public question involved we feel un- 
 willing to rest the decision on this ground alone, or to 
 abstain from the determination of the larger questions 
 involved. 
 
 "We are of opinion that the contract with the village 
 under which defendant operated its lines did not author- 
 ize the ordinance. It is obvious that section 8 must be 
 reasonably construed. It is clear that the provisions, 
 literally construed, would be void. An ordinance mav
 
 80 
 
 require under given conditions that a street car must 
 stop at the end of any block, or at the middle of long 
 blocks, or at railroad crossings, or at places where fire 
 engines may suddenly emerge. But a requirement that 
 a car must stop at every point at which a passenger may 
 wish to enter or alight would be destructive, not only of 
 the purposes for which the corporation was authorized to 
 transact business, but would also completely demoralize 
 traffic, and would be, the authorities generally agree with- 
 out legal force. It is equally clear that a proper construc- 
 tion of the charter provisions must have reference to the 
 situation as a whole, and be determined with due regard 
 to all relevant circumstances. The subject is not to be 
 regarded from a narrow or local point of view. The 
 reasonableness of an ordinance, it is elementary, is a 
 question of public policy. Public policy necessarily in- 
 volves a consideration of a number of important facts 
 appearing on this record. 
 
 "One of these considerations is that the respondent 
 company has a somewhat anomalous legal status. Under 
 the charter provisions which have been herein quoted, it 
 would appear to 'be a street railroad. In Railroad Co. 
 vs. Manitou Forest Syn., 101 Minn., 132, 112 N. W., 13 
 (supra), however, it was held that defendant was not a 
 mere street railroad company, but was organized to con- 
 struct and operate interurban railroads from place to 
 place, and as such had the right to exercise the power of 
 eminent domain. A construction which would give to 
 special legislation by a village or city an effect which 
 would render nugatory rights exercisable under general 
 laws would be subject to obvious and substantial objec- 
 tions. 
 
 "Another consideration is that the principal business 
 of the respondent is to furnish rapid transportation of 
 passengers between various points around Lake Minne-
 
 81 
 
 tonka and the people of cities to the east and of the sur- 
 rounding district to the west. In this business respon- 
 dent had the competition of two steam railroads. If the 
 principle for which the village contends would be adopted, 
 respondents might be compelled to stop at so many street 
 crossings as to seriously hamper, and possibly to destroy, 
 its competitive power. It is clearly opposed to public 
 policy to secure to steam railroads monopoly of local pas- 
 senger traffic. As Summers, J., said in Townscnd r.v. t'ir- 
 rfrrille, 78 Ofa'o, 122, 134, 84 N. E. 792, 16 L. R. A.. (N. 
 S.), 914: 'If every city and village through which such a 
 railway (as the one at bar) passes may require its oars 
 to be stopped at every street intersection to take on or to 
 discharge passengers, and to serve the purposes of a street 
 railway, then its usefulness as a means of intemrban 
 transportation may be very much limited, because so much 
 time w r ill be consumed in passing through cities and vil- 
 lages that it will be no longer practicable for many to 
 travel in that way.' 
 
 "A final consideration is that the ordinance does sub- 
 serve the public convenience in the village. The distance 
 between the place at which the cars are sought to be 
 stopped, George street, and the place at which defendant 
 offers to stop the cars, at Water street, is in considerable. 
 The population between the two points is sparse. How 
 many people would use a stopping point is conjectural; 
 but it is plain that the number would be very small. The 
 inconvenience resulting to the altogether larger number 
 of persons carried to more distant points would inccita- 
 bly tend to decrease the extent of train service. The even- 
 tual diminution in the number and speed of cars, especial- 
 ly if the principle invoked teas applied to a great extent, 
 would appear to more than equal any possible advantage. 
 The weight to be given to this custom is undoubtedly 
 diminished by the fact that this matter rests largely in 
 the discretion of the village council.
 
 82 
 
 "After examination of the question as a whole, we have 
 concluded that the proper course is to reverse the de- 
 cision of the trial court. 
 
 Keversed 1 ." 
 
 Neither the supreme court of Ohio or that of Minnesota 
 announced the doctrine of the paramount right of the 
 general public, but they did that which makes their de- 
 cisions in these interurban cases much better precedents 
 than any mere statement of the rule could possibly be, for 
 they each based the judgment of the court on the rights 
 of the general public, and made the local rights and regu- 
 lations give way to the more important and superior 
 rights. In short, they enforced the rights of the general 
 public as superior and paramount. 
 
 It would be difficult to cite more authoritative decisions 
 if we are to pay any attention to the distinctions between 
 actual decisions and obiter dicta, or statments of rules of 
 law, having only a remote bearing on the cases actually 
 decided. 
 
 The 'Michigan supreme court, in a case recently decided, 
 was evidently actuated by the same considerations as those 
 which influenced the supreme courts of Ohio and Minne- 
 sota. The City of Kalamazoo claiming that the street 
 railway company occupying the streets of the city had no 
 right to operate interurban cars thereon, applied to the 
 circuit court of the county and obtained an injunction 
 restraining the company from operating such cars. As 
 the interurban cars served the people of the city as well 
 as outsiders, it is difficult to understand on what legal 
 ground such relief could be prayed, but the circuit judge 
 granted the injunction. 
 
 The supreme court issued a mandamus vacating the 
 order for an injunction, on the ground that it did not
 
 83 
 
 appear that the citizens of Kalamazoo would suffer any 
 injury if the operation of the cars was continued until the 
 final termination of the case, and an injunction pendente 
 lite was not proper. The court refused to determine the 
 merits of the controversy, although it might have done so 
 as there was no dispute about the facts, and the bill of 
 complaint of the city was devoid of equity, if regard 
 is had for the right of the general public to have the inter-- 
 urban service continued in spite of the litigious idiosyn- 
 cracies and demands of the common council of the City 
 of Kalamazoo. (Michigan United Railways vs. Kalamazoo 
 Circv.it Judge, 123 N. W., 1100.) 
 
 Wlien a street railway company and a municipality 
 enter into a contract, fixing the terms and conditions on 
 which the company -will be permitted to construct and 
 operate street railways, it must, necessarily be understood 
 that the contract is subject to the paramount rights of the 
 general public, which is the third party to he contract, 
 and is represented by the legislature of the state as its 
 trustee. The obligation resting upon all the parties, at 
 the expiration of any term that may have been agreed 
 upon, is that the company, will do and the municipality 
 and the state will permit to be done, whatever the needs 
 and exigencies of the general public may require. 
 
 As I have shown by the lake front cases in Chicago, the 
 state itself, as trustee for the general public, has no more 
 power to ignore or violate the trust reposed in it, than 
 has a municipality or any other trustee. Streets and nav- 
 igable waters are constructed or improved, and exist, for 
 the use of the puWic, which is the beneficiary of the trust 
 and the real owner.
 
 84 
 
 V. 
 
 Retrospectively and prospectively considered the 
 Michigan constitution of 1908 strengthens the prop- 
 osition that street grants for public utilities of a per- 
 manent nature necessarily contemplate that the pub- 
 lic service is to continue beyond the period of limita- 
 tion fixed by the local authorities. 
 
 By far the most important and far-reaching change, 
 made by the new constitution in the constitutional and 
 statutory law of this state, relates to the use of the public 
 streets and highways by public utility corporations. Un- 
 der the constitution of 1850 and the laws passed there- 
 under, the consent of the local authorities to the occu- 
 pancy of the streets, by a street railway or gas company, 
 or other public utility corporation, was not a franchise, 
 but a mere contract between the municipality and the 
 company. The franchises of the company came from the 
 state in virtue of the incorporation of the company under 
 a general law permitting corporate organization. 
 
 These franchises consisted of the privilege of being a 
 corporation, and the right to conduct the business of own- 
 ing and operating street railways, gas works and mains, 
 or the like, and the consent of the local authorities to the 
 use of the streets, was a mere contract, expressed in an 
 ordinance, and accepted by the company, as the grantee 
 therein. This has been the settled law of this state for 
 many years and because it was the law, it was perfectly 
 competent for the contract to extend beyond the corporate 
 life of the company receiving the grant. The contract 
 was a right of property which survived the dissolution 
 and death of the company.
 
 85 
 
 For years it has not been legally correct to speak of 
 these local consents as franchises; but a radical change 
 has been made by the constitution of 1908. It authorizes 
 cities, villages and townships to grant franchises to use 
 the streets and to do a local business therein, but no 
 "municipality" can grant such a franchise for a longer 
 period than thirty years. A security franchise as the 
 basis of municipal ownership bonds can only be granted 
 for twenty years. Strictly speaking, townships are not 
 municipal corporations but the word "municipality" as 
 used in the new constitution includes townships, for it is 
 not reasonable to believe that it was intended to limit 
 grants by cities and villages to thirty years, and to permit 
 townships to make perpetual grants. It is, however, ex- 
 pressly provided that cities and villages can not grant 
 a public utility franchise, that is not revocable, without 
 the approval of three-fifths of the electors voting thereon ; 
 and that in townships a majority vote is sufficient. 
 
 Another provision prohibits public utility corporations 
 from using the streets of any city, village or township 
 without the consent of the city, village or township, and 
 from transacting any local business therein without first 
 obtaining a franchise therefor from such city, village or 
 township. 
 
 Thus it appears that the people of the state in their 
 new constitution have authorized townships, villages and 
 cities to grant irrevocable local franchises for thirty years. 
 Corporate franchises granted by the state are subject to 
 the power reserved to the legislature of amendment, alter- 
 ation or repeal, but no such reservation is made in behalf 
 of townships, villages or. cities. On the contrary it is ei- 
 pressly provided that irrevocable grants may be made by 
 them.
 
 86 
 
 Here we have two conflicting matters of fact: (1) A 
 grant or franchise to use the streets is more difficult to 
 obtain, because it must be approved by the electors in an 
 election; (2) But a franchise that has been so approved 
 is sacred and inviolable, and wholly beyond the reach of 
 any power in the state. 
 
 What effect can this change in the legal situation have 
 upon the rates the public must pay for riding on the 
 street railways, or for a thousand feet of gas? 
 
 Under the constitution of 1850 and the laws passed 
 in pursuance thereof, it was not contemplated that street 
 railways or gas works and mains, should cease to exist 
 when the corporation, owning and operating them ex- 
 pired, or the local contracts under which they were per- 
 mitted to occupy the streets came to an end. On the con- 
 trary it was contemplated and expected by all the parties 
 to these grants and contracts, that the public service 
 should go on forever. It was not contemplated that when 
 the service these utility corporations perform should be- 
 come thousands of times more important and desirable 
 for the people, they should cease to exist and their plants 
 and conveniences go out of business. While the fran- 
 chises of the corporation might expire, and the local con- 
 tracts might come to an end by their own limitation in 
 point of time, yet, it was implied and understood that 
 the street railways and gas works should continue in oper- 
 ation as long as the people need transportation and light, 
 that is, as long as the people shall go and come, and night 
 follows the day. 
 
 Can this be said of grants to be made under the situa- 
 tion of 1908? Does not that instrument in the time limi- 
 tations placed upon grants of franchises by townships, 
 villages and cities mean that such franchises shall wholly
 
 87 
 
 cease to exist at the expiration of the twenty or thirty 
 years for which they may be granted? 
 
 Prior to the taking effect of the new constitution, Jan- 
 uary 1, 1909, there was no constitutional or statutory pro- 
 vision placing a time limit on local grants to public serv- 
 ice corporations. In Ohio they have a stautory limit of 
 twenty-five years, but in Michigan there has been nothing 
 of the kind prior to the new constitution. The local con- 
 sents have been in some cases expressly made perpetual, 
 in other cases they were made without any limit and were 
 therefore perpetual, and in other instances a limit of 
 twenty or thirty years or other period of time was fixed 
 by the agreement of the parties, accompanied with such 
 implied obligations as were inferable from its express 
 terms, the subject matter, and the relation of the parties 
 toward each other and the general public. 
 
 It would be difficult to foretell what the supreme court 
 of the state of thirty or forty years hence will take of 
 a municipal franchise granted under the new constitu- 
 tion, but we can now form an intelligent and trustworthy 
 opinion of the intention of the constitutional convention 
 and of the people, in adopting and approving time limita- 
 tions on all local franchises granted by cities, townships 
 and villages. 
 
 For some fifteen or sixteen years preceding the conven- 
 tion, a street railway controversy had been going on in 
 the city of Detroit, and the corporation counsel of the 
 city and some other delegates were sent to the convention 
 with special reference to that controversy, which became 
 one of the leading subjects of discussion in the delibera- 
 tions of the convention. 
 
 The constitution makers could have expressed their 
 views in two different ways. They could have recognized 
 the permanent nature of investments in public utilities,
 
 88 
 
 and at the same time protected the public by a simple pro- 
 vision that all public service corporations should serve 
 the public efficiently and that in the absence of a local 
 contract or franchise fixing rates and fares reasonable 
 compensation only for the service rendered should be 
 charged by them, or they could insert provisions in the 
 constitution fixing time limitations on local grants. They 
 chose the latter course, but it does not follow that they 
 did this with the view of putting all investments in pub- 
 lic utilities, at the mercy and caprice of the localities, 
 whenever a local franchise expires. That such was the 
 scheme of some members of the convention is beyond ques- 
 tion, but it is very doubtful whether the convention as a 
 whole so understood the provisions, and it is certain that 
 the people had no such view when they adopted the con- 
 stitution. 
 
 It is hardly within the limits of legitimate argument to 
 contend or assume that the people intended to confer any 
 such absolute arbitrary and confiscatory power upon 
 townships, villages and cities. The constitutional conven- 
 tion and the people must have known that it would be im- 
 possible to enlist capital in a public utility, if the entire 
 investment must be earned in net profits over and above 
 operating expenses and interest in thirty years, which will 
 be the case, if the plant of the public utility is to have no 
 value at the end of that period, except what it may be 
 worth as junk. 
 
 On the other hand they must have realized that a secur- 
 ity franchise collateral to the property of a public utility 
 would be of little value, if at the end of twenty years the 
 municipality had the power to almost completely destroy 
 the value of the physical property. 
 
 Is it reasonable to believe that street railway bonds, 
 whether issued by a city, or by a private corporation, with
 
 89 
 
 no other security than a twenty or thirty-year franchise, 
 can be sold in any money market in the world, unless the 
 rates or fares have been fixed high enough to allow the 
 whole investment to be realized as profits within the life 
 of the franchise? 
 
 It may be urged that private capital will be willing to 
 run the risk of getting a new franchise at the expiration 
 of an old one, but what rates of interest and compensa- 
 tion will it charge for running such a risk? 
 
 If the city of Detriot should seek to acquire by pur- 
 chase or condemnation the street railways within, or part- 
 ly within and partly without the city, how is it going to 
 get the money to pay for the property, with no other ulti- 
 mate security, than a twenty-year franchise and the tan- 
 gible property as junk? 
 
 And if the Detriot United Railway surrenders its pres- 
 ent franchises and accepts a new one under the constitu- 
 tion of 1908, how is it going to borrow any money to make 
 the extensions and betterments the increase in the popu- 
 lation and business of the city has made necessary, with 
 no security but a franchise which expires absolutely in 
 thirty years? 
 
 These are important questions, as it is very plain that 
 the new constitution is a barrier to low rates of fare 
 unless some scheme can be devised by which the perma- 
 nent investment in a public utility can be saved from de- 
 struction at the mere unrestrained will of the locality 
 when a municipal franchise expires. 
 
 The only possible way of avoiding this dilemma is to 
 adopt the very doctrine for which I contend, viz: That 
 the constitutional and statutory provisions limiting the 
 life of local franchises to twenty and thirty years, were 
 not intended to be absolute limitations, but that all local 
 franchises carry with the grant an implied covenant on
 
 90 
 
 the part of the grantee that at the expiration of the period 
 agreed upon, it or its successors and assigns will continue 
 the public service, and an implied covenant on the part 
 of the municipality that it will not do anything to pre- 
 vent the company from so doing. 
 
 The public will be protected because the company as a 
 public utility corporation will be legally bound to per- 
 form the service it renders the public for reasonable com- 
 pensation, and it can be assumed that in the absence of 
 a local contract, or franchise, fixing the rates of compen- 
 sation, the state will interpose its authority. 
 
 It has already done so, as far as street railway com- 
 panies, whose business is not wholly within the corporate 
 limits of a single municipality, as it has conferred author- 
 ity on the Michigan State Railroad Commission to fix, in 
 the absence of local agreements, rates of fare for street 
 railway companies, not "engaged solely in the transpor- 
 tation of passengers within the limits of cities or within 
 a distance of five miles of the boundaries thereof." (Pub- 
 lic Acts, 1909, p. 708.) 
 
 Some persons have assumed that the city of Detroit 
 can borrow money to pay for the street railways, on a 
 security franchise for twenty years, because the Detroit 
 United Railway was able to borrow millions of money on 
 local grants expiring in fifteen or twenty years, but the 
 local grants under which the Detroit United Railway 
 owns and operates street railways in the city of Detroit, 
 were made under the constitution and laws in force prior 
 to the adoption of the constitution of 1908, and neither 
 the company or the bond holders or the city expected 
 that a renewal of the grants on reasonable terms could 
 not be obtained. The grants carried with them the neces- 
 sary implication that if the terms for a renewal could 
 not be agreed upon, the company was to go on with the
 
 91 
 
 operation of its lines, after the time limits expired, but 
 subject to its obligation as a common carrier to charge 
 reasonable fares. This implication was necessary and 
 legitimate, in order to preserve the rights of the public, 
 and to prevent the city from having and exercising the 
 power to confiscate or destroy a very valuable property 
 devoted to the public use. 
 
 And a like implication in the case of local franchises 
 granted under the constitution of 1908, is equally neces- 
 sary and legitimate in order to prevent that constitution 
 from becoming a delusion and a snare, and from being 
 properly characterized as the most arbitrary, unjust and 
 impolitic, constitution ever adopted in the United States. 
 
 Having considered these provisions of the new consti- 
 tution from a radical point of view, I now pass to their 
 consideration from a more conservative and much better 
 standpoint. In my judgment these new constitutional 
 limitations do not accomplish as much as is claimed for 
 them. 
 
 One thing they certainly do. They put an end to what- 
 ever power the legislature had under the constitution of 
 1850, to grant the use of the streets to public service cor- 
 porations without the consent of the local authorities. 
 But could the legislature itself under the constitution of 
 1850, grant the use of the streets to street railway cor- 
 porations? I have had occasion to make a strong con- 
 tention to the contrary, based upon the provisions of the 
 constitution of 1850 localizing the public highways of 
 the state. 
 
 In the first place the state being prohibited from engag- 
 ing in any work of internal improvement could not itself 
 improve the highways. The legislature \vas prohibited 
 from vacating or altering any road laid out by commis- 
 sioners of highways or any street in any city or village
 
 92 
 
 or in any recorded town plat. The commissioners of high- 
 ways were township officers, designated by the constitu- 
 tion, who could not be wholly deprived of their powers; 
 and the boards of supervisors of counties, were given 
 power to provide for laying out highways and the con- 
 struction of bridges. 
 
 Under these restrictions on the legislative, the town- 
 ships, cities and villages of the state could not be de- 
 prived of a reasonable control of their highways and 
 streets, and the new constitution in reserving to them 
 such reasonable control, simply gives expression to and 
 affirms that doctrine. (Art. VIII, Sec. 28.) 
 
 It is true, the supreme court sustained the power of 
 the legislature under the constitution of 1850 to grant the 
 use of 'the streets to telephone and telegraph companies 
 without the consent of the local authorities, but such com- 
 panies make very little use of the streets, and their poles 
 and wires are not an improvement of the streets for high- 
 way purposes, like the tracks of a street railway company. 
 A distinction might have been made between street rail- 
 ways, and other uses of the street not facilitating public 
 travel thereon, but the question never arose and was of 
 no practical importance because in the case of street rail- 
 ways the legislature did always require the local assent. 
 
 The new constitution is not as revolutionary in this re- 
 spect as one might at the first blush believe it to be. 
 
 Whether the provision requiring a local franchise is 
 more revolutionary depends upon what may be covered 
 by a city, village or township in making a local grant. 
 The legislature retains its power to provide by general 
 laws 1 for the incorporation of street railway companies 
 and other corporations, including its right to amend, 
 alter or repeal such laws.
 
 Can the local authorities in granting a local franchise 
 abridge the power of the legislature to amend, alter or 
 repeal; and if a local franchise fixed rates of fare or 
 charges, or imposed regulations concerning, say, the pav- 
 ing of the streets, could not the legislature change the 
 rates of fare or charges, or the paving regulations, not- 
 withstanding the terms of the local franchise? 
 
 My opinion is that the legislature could do so. (In- 
 dianapolis vs. Navin, 151 Ind., 139; Stanislaus Co. vs. 
 Sa-n Joaquin Etc. Co., 192 U. 8., 201 ; Fair Haven R. R* 
 Co. vs. New Haven, 203 U. S., 379.) 
 
 It must be remembered that the power to amend, alter 
 and repeal was reserved 1 in constitutions and statutes, on 
 the suggestion of Justice Story in- the Dartmouth Col- 
 lege case, to prevent the charters of corporations from 
 becoming inviolable contracts, and this object would be 
 defeated, if municipalities in making street grants could 
 put them beyond the reach of the power of the legislature 
 to amend, alter or repeal. 
 
 That power must be exercised subject to the rights of 
 property guaranteed by the state and federal constitu- 
 tions, but with the restrictions thus imposed 1 , the legis- 
 lature retains full power. 
 
 Local street grants, contracts and franchises, are neces- 
 sarily subject to the power of legislature, and while these 
 must be regarded as inviolable contracts as far as action 
 by the municipalities is concerned, it cannot be truth- 
 fully said, that the legislature is equally without power to 
 change the terms and conditions of such contracts. 
 
 In Taylor vs. Street Railway/ Co., 80 Mich., 77, the 
 supreme court of this state sustained the power of the 
 legislature to modify the local contract.
 
 94 
 
 Justice Grant, for the court, said: 
 
 "The power to grant immunity to such corporations 
 from legislative regulation and control is an important 
 one. A village of a few hundred inhabitants may in 
 much less than thirty years grow to a city of many thou- 
 sands. Bay City well illustrates this fact. What in the 
 one would cause no damage might in the other cause 
 great damage. The village council cannot well provide 
 regulations and ordinances applicable to a large city. 
 It is, therefore, highly important that the legislature 
 should retain the power to pass enactments for the con- 
 trol of these quasi public corporations suitable to the 
 changed state of affairs." 
 
 In the Indianapolis Street Kailway case of Citizens 
 Street R. Co. vs. City Ry. Co., 64 Fed., 647, the local 
 grant was for thirty-seven years, and the court held that 
 limitation was invalid, and the franchise perpetual, but 
 subject to the power of the legislature. 
 
 Woods, Circuit Judge, said: 
 
 "Subject to the reserved power of the legislature to 
 amend or repeal the act, perpetual corporate existence 
 was given in explicit terms; and, in the absence of express 
 
 or implied limitation thereon, the necessary presumption 
 is that the franchise granted was intended to be of like 
 duration, subject only to legislative revocation. It is not 
 to be supposed that the legislature intended that there 
 should be corporate existence without a franchise the 
 only reason for such existence. It is not a question of 
 perpetuity or of irrevocable right. If it were, different 
 rules of construction would prevail. No presumption or 
 inference could be allowed in favor of a perpetual right, 
 and every reasonable intendment against it should be in- 
 dulged. But danger in that direction lurks rather in the
 
 95 
 
 supposed power of the common council. If it had author- 
 ity to agree to a franchise for thirty years, it might, with 
 equal collusiveness, have stipulated for one of sixty or 
 ninety years, or any longer term, imposing upon the city, 
 it might be for generations, the evils of a monopolistic 
 perpetuity. Thirty years are too many for a burdensome 
 or unjust grant. As was> said in Taylor vs. Railway Co., 
 80 Mich., 77, 45 N. W., 335, it is highly important that 
 the legislature should retain the power to pass enact- 
 ments for the control of these quasi public corporations 
 suitable to changed conditions of affairs. The village or 
 small city cannot well provide regulations and ordinances 
 applicable to a large city. 
 
 "If agreements by common' councils like the one in 
 question are authorized 1 and binding, they must, when 
 made, operate to suspend, pro tanto, the reserved power 
 of the legislature, by repealing the act, to terminate the 
 life of companies organized under it. They are incon- 
 sistent with that power. On the contrary, if, when made, 
 the agreements create no vested right because made sub- 
 ject to the power of the legislature to revoke or modify 
 them, then in legal contemplation they are without force, 
 and the power of city councils to make them is a mere 
 pretense. It is a delegated power to make an agreement 
 which cannot bind, or ought not to bind, one party, the 
 corporation, because it does not bind the other party, the 
 state. In respect to such power the city is the agent of 
 the state; and, besides being anomalous, the proposition 
 that the city and company will be bound by such con- 
 tracts, and the state not bound, is manifestly unju.pt and 
 unfavorable to the public interests." 
 
 And this power of the legislature is my answer to the 
 proposition heretofore stated that when a local franchise 
 is granted with the approval of the electors it is beyond 
 any power in the state.
 
 96 
 
 On this view of these new constitutional provisions 
 the legislature can grant relief from an improvident local 
 franchise, whether for thirty years or any less period. 
 
 The danger of a thirty-year grant, which is irrevocable 
 and inviolable, is that long before the thirty years have 
 expired, the terms of the franchise may become alto- 
 gether unreasonable and unjust to either the one or the 
 other of the parties to it. 
 
 The construction which retains the power of the legis- 
 lature, is much more to be preferred than that which per- 
 mits either the grantor or the grantee to bind itself 
 absolutely for thirty years.
 
 97 
 
 VI. 
 
 Conclusive proof of the implied obligation of the 
 city of Detroit to permit the street railway service to 
 contiune after Nov. 14, 1909, is found in the fact 
 that the public service is of such paramount and over- 
 whelming importance that the common council of 
 the city could not be induced, with any intention that 
 its order would be obeyed or enforced to pass a reso- 
 lution directing the Detroit United Railway to stop 
 operating its cars and to remove its tracks and over- 
 head structures from the streets. 
 
 This is a practical and most instructive illustration of 
 the obligation 1 of Tx>th> the city and 'the street railway com- 
 pany to serve the general public. 
 
 That the common council of the city of Detroit appre- 
 ciates the nature of the dilemma with which it is con- 
 fronted, is shown by an ordinance which it has passed, 
 but was prevented from giving effect 1>y publication, by 
 an injunction issued by the United States circuit court 
 for the eastern district of Michigan at the suit of the 
 Guaranty Trust Company of New York. 
 
 The first >and second sections of that ordinance are as 
 follows : 
 
 Section 1. On and after the passage of this ordinance, 
 every street railway company, its successors or assigns, 
 operating street railways in the city of Detroit, which 
 operates any street car on any street in the whole or any 
 part of which its right to operate cars has expired, or on 
 any street in the whole or any part of which its right to 
 operate street cars was never legally obtained, shall oper- 
 ate all of its cars over the whole of said line or route of
 
 98 
 
 which said street is a part upon the following terms and 
 conditions : 
 
 Section 2. The operation of a single car by said cor- 
 poration on any street over that portion where its right 
 to operate street cars has expired, or on any street over 
 that portion where its right to operate street cars was 
 never legally obtained, shall constitute an acceptance of 
 the terms herein set forth. 
 
 Other sections obligate the street railway company 
 to sell on its cars five tickets for fifteen cents, with rights 
 of transfer to any other line or route operated by the 
 company. 
 
 Other obligations are also imposed on the street rail- 
 way company. 
 
 Although the city has never been able to give this or- 
 dinance effect and force, it may be referred to for the 
 purpose of showing the attitude of the municipal author- 
 ities. 
 
 It is a frank and open confession on the part of the 
 common council that it does not propose to take the 
 responsibility of ordering the Detroit United Railway to 
 stop the service on the lines in question. 
 
 But it is a very simple and plain proposition that the 
 city cannot force a contract on the Detriot United Rail- 
 way in any such way. 
 
 The Detroit United Railway being in the adverse and 
 hostile possession of the streets and rights in controversy, 
 it is legally impossible to raise any implied or express 
 promise on its part to pay rent or do any other thing in 
 recognition of the alleged superior title and claims of 
 the city of Detroit. 
 
 The attitude of the parties toward each other forbids 
 the creation of any new contract between them, and the
 
 99 
 
 declaration of one of the parties that a continuance of 
 the hostile relations shall amount to an acceptance of con- 
 tract obligations, is a manifest absurdity. 
 
 The Supreme Court of Michigan has so held. (Hogsett 
 vs. Ellis, 17 Mich., 351-367; Wilmarth vs Palmer, 34 
 Mich., 347.) 
 
 lu Hogsett vs. Ellis, Judge Christiancy said: 
 
 "It is very clear that assumpsit for use and occupation 
 cannot be maintained where the relation of landlord and 
 tenant did not exist during the occupancy, or when the 
 holding was adverse to the owner, because, among other 
 reasons, a disputed title can not be tried in an action of 
 assumpsit," 
 
 In Wilmarth r*. Palmer, Judge Campbell said: 
 
 "The suggestion that the tenant held adversely would 
 destroy the relation of landlord and tenant entirely, and 
 be equally fatal as an objection to recovering rent." 
 
 The law applicable to the case was settled by the 
 Supreme Court of Michigan as long ago as Ward vs. War- 
 ner, 8 Mich. 508. 
 
 In that case the owner of a private canal which had 
 been cut on his land and for the major part at his ex- 
 pense, gave notice that parties using the canal would be 
 charged twenty-five cents for each 1,000 feet of logs that 
 they might run through it. 
 
 Some of the parties notified replied that they denied 
 the right of the owner to charge tolls for the use of the 
 canal. 
 
 In an action of assumpsit to recover compensation 
 for a subsequent use of the canal, the court, by Chief 
 Justice Martin, among other things said :
 
 100 
 
 "For the purpose of a revocation of the general li- 
 cense, and a declaration that compensation would there- 
 after be demanded, the notice, having come to the knowl- 
 edge of the defendants, was sufficient and competent to 
 impose upon them a liability to pay for its use, accord- 
 ing to the terms of the notice, if subsequently used, Jiad 
 the right to demand any compensation been acknowl- 
 edged, or recognized and not denied; for in such case 
 the law will presume that they used it upon the terms 
 imposed, and raise the corresponding duty, and imply 
 the contract accordingly. But in the present case all 
 such implication is precluded by the fact that the de- 
 fendants denied any right to demand compensation for 
 the use, and used it in defiance of the plaintiff's claim, 
 and under the claim of right in themselves; and they 
 cannot therefore be presumed to have acceeded to the 
 terms imposed. 
 
 "If, then, any duty can be implied, it is to pay what 
 such use is reasonably worth. Now, as already re- 
 marked, the plaintiff had a right to require payment, 
 as a condition to the use of the canal; and had he re- 
 quired such, but fixed no price, and the defendants had 
 used it with knowledge of such terms, and under the 
 condition, beyond doubt the duty would be raised to pay 
 what such use would be reasonably worth; but if the 
 effect of a denial of the right to demand compensation, 
 and use of the canal in contravention of the claims as- 
 serted by the plaintiff, will prevent the implication of 
 a duty to pay a specific rate imposed, how can it be 
 said that it will still raise the duty of paying according 
 to its w r orth? If the denial goes to anything, it must 
 go to the whole claim of the plaintiff for compensation, 
 and will preclude every presumption of the recognition 
 of a duty upon which a contract can be implied; while, 
 on the other hand, if the law will imply a duty, it will
 
 101 
 
 imply one co-extensive with the terms imposed. It goes 
 to the whole remedy, whether for a specific price, or for 
 reasonable compensation. But the law implies the duty 
 only where the right of dominion over the subject mat- 
 ter is conceded, or not questioned; and never where the 
 use is under an adverse claim of right,, or a denial of 
 that asserted." 
 
 The common council of the city of Detroit has still 
 further recognized the paramount importance of the 
 public service by passing the preambles and resolutions 
 of October 19, and October 26, 1909, and by failing to 
 reject and tacitly accepting the counter proposition of 
 the company contained in the communication and notice 
 served on the city on the 13th day of November, 1909, 
 and printed in the published proceedings of the council 
 of November 16, 1909. 
 
 PREAMBLE AND RESOLUTION. 
 
 October 19, 1909. 
 By Aid. Heineman: 
 
 Whereas, Street railway franchises of the Detroit 
 United Railway or its predecessor in title, and all right 
 to operate street railways upon the following streets and 
 portions of streets in the city of Detroit have heretofore 
 expired, or will have expired on November 14, 1909, to- 
 wit : 
 
 MICHIGAN AVENUE. 
 
 The north track from Woodward avenue to Rowland 
 street, and from Porter street to Livernois avenue; the 
 south track from Abbott street to Livernois avenue.
 
 102 
 
 CONGRESS AND BAKER STREETS. 
 
 On Mt. Elliott avenue, from Jefferson avenue to Fort 
 street east; on Fort street east to Brush street; on 
 Brush street, from Fort street east to Congress street. 
 
 The north track on Congress street, from Brush street 
 to Woodward avenue; all tracks from Woodward avenue 
 westerly to Sixth street ; on Brooklyn avenue from Porter 
 street to Baker street; on Baker street from Brooklyn 
 avenue to Twenty-fourth street; on Twenty-fourth street 
 from Baker street to Dix avenue; on Dix avenue from 
 Twenty-third street to Livernois avenue. 
 
 CASS AVENUE AND THIRD STREET, 
 
 On Larned street from Third street to Griswold street; 
 on Griswold street from Larned street to State street; 
 on State street, a single track from Griswold street to 
 Rowland street; all tracks on State street, between Row- 
 land street and Cass avenue; on Cass avenue from State 
 street to Ledyard street; on Ledyard street from Cass 
 avenue to Third avenue; on Third avenue from Ledyard 
 street to Holden avenue; on Holden avenue from Third 
 avenue to Greenwood avenue. 
 
 TRU-MBULL AVENUE. 
 
 From Abbott street northerly to the railroad crossing. 
 
 ATWATER STREET. 
 
 From Woodward avenue to Brush street; on Brush 
 street from Atwater street to Jefferson avenue. 
 
 WOODWARD AVENUE. 
 
 From Pallister avenue to the railroad crossing; from 
 the railroad crossing southerly to Grand River avenue; 
 from Fort street west southerly to the river, all tracks 
 except one.
 
 103 
 BRUSH AND RUSSELL STREETS. 
 
 On Brush street from Gratiot avenue to Kowena street ; 
 on Kowena street from Brush street to St. Antoine 
 street; on St. Antoine street from Rowena to Farns- 
 worth street; on Farnsworth street from St. Antoine 
 street to Russell street; on Russell street north from 
 Farnsworth street to the end of the line. 
 
 CHENE STREET. 
 
 On Atwater street from Jos. Campau avenue to Chene 
 street; on Chene street from Atwater street northerly to 
 Newton street. 
 
 JEFFERSON AVENUE. 
 
 From a point 194 feet west of the west line of Fifth 
 street to Concord avenue; from Field avenue to a point 
 200 feet east of Baldwin avenue. 
 
 GRATIOT AVENUE. 
 
 On Monroe avenue, the northwest track from Wood- 
 ward avenue to Farmer street; on Monroe avenue, both 
 tracks from Farmer street to Randolph street; on Ran- 
 dolph street from Monroe avenue to Gratiot avenue; on 
 Gratiot avenue from Randolph street to Sheridan ave- 
 nue. 
 
 MACK AVENUE. 
 
 From Gratiot avenue to Baldwin avenue. 
 
 Therefore be it 
 
 Resolved, and the common council of the city of De- 
 troit especially declare, That all right and title on the 
 part of said company, the Detroit United Railway, to 
 such franchises and tracks maintained thereunder in 
 the said streets above mentioned, have heretofore termin- 
 ated or will have terminated on November 14, 1909; and 
 that any further use on the part of said company of said
 
 104 
 
 tracks located as above set forth, where the right to 
 operate cars has expired, is by sufferance only and with- 
 out express or implied waiver upon the part of the city 
 of Detroit to enforce its rights in regard to such streets 
 and to re-possess itself of the same; and that any further 
 use on the part of said company of said tracks where the 
 right to operate cars will have expired November 14, 
 1909, after said date, is by sufferance only and without 
 express or implied waiver upon the part of the City of 
 Detroit to enforce its rights in regard to such streets 
 and to re-possess itself of the same. 
 
 Adopted as follows: 
 
 Yeas Aid. Allan, Burton, Deimed, Ellis, Field, Friewald, 
 Garvey, Glinnan, Goeschel, Grindley, Gutman, Harpfer, 
 Heineman, Keating, Koenig, Konkel, Korte, Lempke, Os- 
 trowski, Owen, Reinhardt, Rosenthal, Rutter, Schulte, 
 Shapland, Skrzycki, Theisen, Thompson, Tossy, Trevor, 
 Vernor, Walsh, Watson, Zoeller, Zink and the President 
 pro tern 35. 
 
 Nays None. 
 
 PREAMBLE AND RESOLUTION. 
 
 October 26, 1909. 
 By Aid. Heineman: 
 
 Whereas, There is now pending in the Circuit Court 
 of the United States for the Eastern District of Michi- 
 gan, Southern Division, a case entitled: Guaranty Trust 
 Company of New York vs. City of Detroit and others, 
 which involves the validity of an ordinance passed by 
 the common council of the city of Detroit and commonly 
 called the Hally Ordinance, which ordinance among 
 other things prescribed the terms and conditions under
 
 ior> 
 
 which a street railway might continue to operate cars 
 when and where its franchise right to do so had ex- 
 pired; and. 
 
 Whereas, The court has issued a temporary injunction 
 whereby the city of Detroit, its agents, servants and at- 
 torneys are strictly restrained and enjoined from pub- 
 lishing or attempting to publish that ordinance and are 
 likewise enjoined from enforcing or attempting to en- 
 force by any means whatsoever the said ordinance; and 
 
 Whereas, Said ordinance is without force or effect 
 until published and it is the duty of the city of Detroit 
 to respect and obey the mandate of the court; and 
 
 Whereas, The franchise right of the Detroit United 
 Railway, as the successor in title, to operate a street 
 railway on Woodward avenue from Pallister avenue to 
 the railroad crossing expired July 13, 1906, and has not 
 been renewed by the City of Detroit ; and 
 
 Whereas, The franchise right of the Detroit United 
 Railway, as the successor in title, to operate a street 
 railway line on Twenty-fourth street from Baker street 
 to Dix avenue, and on Dix avenue from Twenty-fourth 
 street to Livernois avenue, either expired on April 17, 
 1906, or will have expired on November 14, 1909, and 
 the city of Detroit has granted no franchise to operate 
 cars on said streets after November 14, 1909 ; and 
 
 Whereas, The franchise right of the Detroit United 
 Railway, as the successor in title, to operate a street 
 railway line on the following streets and portions of 
 streets will have expired on November 14, 1909, to-wit : 
 
 MICHIGAN AVENUE. 
 
 The north track from Woodward avenue to Rowland 
 street, and from Porter street to Livernois avenue; the 
 south track from Abbott street to Livernois avenue.
 
 106 
 
 CONGRESS AND BAKER STREETS. 
 
 On Mt. Elliott avenue, from Jefferson avenue to Fort 
 street east; on Fort street east to Brush street; on 
 Brush street, from Fort street east to Congress street. 
 
 The north track on Congress street, from Brush street 
 to Woodwad avenue; all tracks from Woodward avenue 
 westerly to Sixth street; on Brooklyn avenue from Porter 
 street to Baker street; on Baker street from Brooklyn 
 avenue to Twenty-fourth street; on Twenty-third street 
 to Dix avenue from Baker street; on Dix avenue from 
 Twenty-third street to Twenty-fourth street. 
 
 CASS AVENUE AND THIRD STREET. 
 
 On Lamed street from Third street to Griswold 
 street; on Griswold street from Lamed street to State 
 street; on State street, a single track from Griswold 
 street to Rowland street; all tracks on State street, be- 
 tween Rowland street and Cass avenue; on Cass avenue 
 from State street to Ledyard street ; on Ledyard street 
 from Cass avenue to Third avenue; on Third avenue from 
 Ledyard street to Holden avenue ; on Holden avenue from 
 Third avenue to Greenwood avenue. 
 
 TRUMBULL AVENUE. 
 
 From Abbott street northerly to the railroad crossing. 
 
 ATWATER STREET. 
 
 From Woodward avenue to Brush street; on Brush 
 street from Atwater street to Jefferson avenue. 
 
 WOODWARD AVENUE. 
 
 From the railroad crossing southerly to Grand River 
 avenue; from Fort street west southerly to the river, all 
 tracks except one. 
 
 BRUSH AND RUSSELL STREETS. 
 
 On Brush street from Gratiot avenue to Rowena street ; 
 on Rowena street from Brush street to St. Antoine
 
 107 
 
 street; on St. Antoine street from Rowena to Fansworth 
 street; on Farnsworth street from St. Antoine street to 
 Russell street; on Russell street north from Farnsworth 
 street to the end of the line. 
 
 CHENE STREET. 
 
 On Atwater street from Jos Campau avenue to Chene 
 street; on Chene street from Atwater street northerly 
 to Newton street. 
 
 JEFFERSON AVENUE. 
 
 From a point 194 feet west of the west line of Fifth 
 street to Concord avenue; from Field avenue to a point 
 200 feet east of Baldwin avenue. 
 
 GRATIOT AVENUE. 
 
 On Monroe avenue, the northwest track from Wood- 
 ward avenue to Farmer street; on Monroe avenue, both 
 tracks from Farmer street to Randolph street; on Ran- 
 dolph street from Monroe avenue to Gratiot avenue; on 
 Gratiot avenue from Randolph street to Sheridan ave- 
 nue. 
 
 MACK AVENUE. 
 
 From Gratiot avenue to Baldwin avenue. 
 
 And the city of Detroit has granted no franchise right 
 to operate cars on said streets or portions of streets 
 after November 14, 1909 ; and 
 
 Whereas 1 , All of said streets and portions of streets 
 would after November 14, 1909, be subject to the terms 
 and conditions of the Hally Ordinance, if the same is 
 n valid enactment and is accepted by the Detroit United 
 Railway; and 
 
 Whereas, No term franchise or agreement under the
 
 108 
 
 revised constitution can be valid or binding unless the 
 franchise or agreement shall have first received the 
 affirmative vote of three-fifths of the electors of the city; 
 and 
 
 Whereas, Under the revised constitution every street 
 railway company is denied the right to use the highways, 
 streets, alleys or public places of any city without the 
 consent of the duly constituted authorities of such city, 
 and is denied the right to transact a local business in 
 the city without first obtaining a franchise therefor from 
 such city. Therefore, be it 
 
 Resolved, That consent, permission and authority is 
 hereby granted to the Detroit United Eailway to con- 
 tinue from day to day after November 14, 1909, to oper- 
 ate its cars upon the streets and portions of streets 
 above set forth under the same terms and conditions, 
 except as to percentages on gross receipts now prevail- 
 ing in the City of Detroit, whether due to contract agree- 
 ment or not, upon the payment weekly by the Detroit 
 United Railway to the city treasurer of the sum of three 
 hundred dollars for each day that the streets and por- 
 tions of streets above set forth are used by said company 
 in the operation of its railway or railways ; and be it fur- 
 ther 
 
 Resolved, That this resolution is subject to revocation 
 at any time at the will of the common council or of the 
 people of the city of Detroit. 
 
 Adopted as follows: 
 
 Yeas Aid. Allan, Burton, Deimel, Ellis, Field, Gar- 
 vey, Glinnan, Goeschel, Grindley, Gut man, Harpfer, 
 Heineman, Keating, Koenig, Konkel, Korte. Lempke, Os- 
 trowski, Owen, Reinhardt, Rosenthal, Schulte, Shapland, 
 Skrzycki. -Theisen, Thompson, Trevor, Vernor, Walsh, 
 Watson, Wing and the President 32. 
 
 Nays None.
 
 109 
 
 RECONSIDERATION. 
 
 Aid. Field moved to reconsider the vote by which the 
 resolution was adopted. 
 
 Aid. Heineman moved to suspend Rule 28 for the pur- 
 pose of indefinitely postponing the motion to reconsider, 
 which motion prevailed. 
 
 Aid. Heineman then moved that the motion to recon- 
 sider be indefinitely postponed, which motion prevailed. 
 
 The regular order was resumed. 
 
 COMMUNICATION AND NOTICE. 
 November 13, 1909. 
 
 To the Honorable the Mayor and Common Council: 
 
 Gentlemen: This company has been informed of the 
 passage by your honorable body of two certain resolu- 
 tions concerning the operation by the company of its 
 lines of street railway on certain streets, the purpose 
 of said resolutions being intended to express certain 
 claims made by your honorable body in behalf of the 
 city respecting the right of the company to operate its 
 cars on said certain streets, and also to state certain 
 terms and conditions which may be enforced against the 
 company after the 14th of November, 1909. 
 
 It is noted that one of these resolutions, that adopted 
 by your honorable body October 19, 1909, which only 
 came to the knowledge of this company through the or- 
 dinary channels of publication, states that certain fran- 
 chises have heretofore terminated or will have termin- 
 ated on November 14, 1909, and that any further use by 
 the company of its tracks and franchises on the streets
 
 110 
 
 and parts 1 of streets therein named, will be by the suffer- 
 ance only and without express or implied waiver on the 
 part of the city respecting its rights in regard to such 
 streets. 
 
 The other resolution, namely, that passed at a meeting 
 of your honorable body October 26, 1909, a certified copy 
 of which was served on this company November 11, 1909, 
 recites that the city claims that on the certain streets 
 and avenues therein named that no franchise right has 
 been granted to operate cars on said streets or parts of 
 streets after November 14, 1909, and said resolution pro- 
 vides that the continued operation of cars by the com- 
 pany on said streets after said date, shall be conditioned 
 on their operation by the company under and subject to 
 all the terms and conditions under which they are now 
 operated, except as to the collection of a specific tax as 
 heretofore provided, and upon an added condition that 
 the company shall pay to the city a stated sum of three 
 hundred dollars ($300.00) per day. 
 
 The company does not agree with the views and claims 
 stated in said resolutions, which, in its opinion, are con- 
 trary to the rights of the company, and believes that 
 after due investigation and consideration, you will con- 
 cede that your position is erroneous. The company, 
 however, recognizes that you are equally desirous with 
 the company that the public shall not be deprived of 
 any service that they have heretofore enjoyed, and that 
 the interest, comfort and convenience of the public will 
 be best served by continuing uninterruptedly the service 
 as now rendered, pending the results of an adjustment 
 of all matters of difference which it is believed all par- 
 ties desire. 
 
 The company, therefore, without waiving any rights 
 or privileges to which it is entitled under present con- 
 ditions, and conceding that the city does not waive any
 
 Ill 
 
 of its rights or privileges, and without prejudice to the 
 rights or privileges of either the city or the company, 
 will, in the exercise of its rights and duties, continue to 
 maintain and operate the lines in question under the 
 terms and conditions under which the same are now 
 maintained and operated, and to render service as hereto- 
 fore, and for the reasons above indicated and to avoid 
 litigation will in addition pay to the city the sum of 
 three hundred dollars ($300.00) per day f&r the time 
 being, or until such time as the relations between the 
 company and the city are readjusted. 
 Yours very truly, 
 
 J. C. HUTCHINGS, 
 
 President. 
 
 Ordered printed in proceedings and placed on file. 
 
 By this truce, neither the city of Detroit or the De- 
 troit United Railway gained anything. The general 
 public gained everything. The right of the people to 
 continue to go and come on the street cars was recog- 
 nized by both combatants. It is like a truce between 
 two opposing armies, to permit them to perform the 
 higher duty of removing their dead and wounded from 
 the field of battle. 
 
 I submit this question. Which would be more in ac- 
 cord with the American system of jurisprudence, and 
 with the sentiments of a thoroughly civilized race of 
 men, to make the truce permanent, and settle the con- 
 troversy by submitting the question whether the rates of 
 fare charged by the street railway company are excessive 
 or not, to a court of competent jurisdiction, possessed of 
 the necessary legal machinery, and charged with the 
 duty, of doing equal and exact justice, or to renew a 
 barbarous struggle, in which each of the husky warriors 
 seeks to deride to issue himself, and proposes to use
 
 112 
 
 whatever power lie may possess to accomplish bis own 
 purpose. 
 
 Arbitration or war! 
 
 Which is the best? 
 
 The constitution and laws of Michigan rightly con- 
 strued do not permit a street railway war at the ex- 
 piration of each local grant or franchise. A matter so 
 important to the general public, to the people of a muni- 
 cipality, and to the street railway company concerned, 
 should not be made the football of local politicians, the 
 food of the sensational press, and the war cry of schem- 
 ing and ambitious demagogues. 
 
 The city of Detroit is Charybdis. The Detroit United 
 Railway is Scylla. The Public is Odysseus sailing, be- 
 tween them. He will lose some of his men to Scylla, but 
 he will escape from the engulfing water of Charybdis. 
 
 Earth Shaker himself cannot stop Odysseus, the pub- 
 lic, from navigating the streets of Detroit. Of his ship 
 this may be said: 
 
 "Now from the rocks the rapid vessel flies, 
 And the hoarse din like distant thunder dies; 
 To Sol's bright isle our voyage we pursue, 
 And now the glittering mountains rise to view." 
 
 Odyssey, Pope's Translation, XII. 
 
 Since the foregoing paragraphs were written and on 
 December 14, 1909, just thirty days after the alleged 
 expiration of the local grants in question, the common 
 council passed a resolution, introduced by Aid. Glinnan, 
 and approved by the mayor, and which resolution as re- 
 ported by the committee on franchises, with the action 
 of the common council thereon, is as follows:
 
 113 
 
 GLIXXAX RESOLUTION. 
 
 December 14, 1901K 
 
 To the Honorable Common Council : 
 
 Gentlemen: Your committee on franchises, to whom 
 was referred the resolution presented by Aid. Glinnan at 
 the session of the common council of November 30th 
 (J. C. C., p. 1586), respectfully report that we have given 
 the matter careful consideration. Your committee has 
 been in consultation with the corporation counsel on this 
 matter and is in receipt of a written opinion, under date 
 of December 13, 1909, on the various legal points, etc., 
 involved. This resolution provides for a lower rate of 
 street car fare, pending the permanent settlement of the 
 entire street railway question, and is, in the opinion of 
 your committee a proper measure for adoption by your 
 honorable body. A few changes in the phraseology and 
 certain other amendments are recommended by the cor- 
 poration counsel and have been incorporated into the 
 resolution which is herewith submitted as amended with 
 the recommendation that it be adopted. 
 
 Respectfully submitted, 
 
 JOHN HARPFER, 
 
 THOS. E. GLINNAN, 
 
 GEO. A. OWEN, 
 
 Louis E. TOSSY, 
 
 Committee on Franchises. 
 
 Accepted and leave being granted the following resolu- 
 tion was offered : 
 
 By Aid. Harpfer : 
 
 Whereas, The franchise right of the Detroit I'liim! 
 Railway, as successor in title, to operate a street railway 
 on certain streets -and avenues in the City of Detroit,
 
 114 
 
 some of which are hereinafter designated, has now ex- 
 pired, and ceased to exist, and, 
 
 Whereas, negotiations and litigation looking toward a 
 satisfactory arrangement for the operation of street cars 
 on said several streets and avenues in the city of Detroit, 
 either by franchise right or otherwise, are in progress; 
 and, 
 
 Whereas, said arrangement has not yet been perfected 
 and no definite information is at hand as to w r hen said 
 arrangement will be perfected; and, 
 
 Whereas, it is contrary to the laws and the constitution 
 of the State of Michigan for the said Detroit United Rail- 
 way or any other person, persons, corporation or com- 
 pany to operate a street car line upon and along any 
 street or avenue in the city of Detroit without authority 
 from the "said city; and, 
 
 . Whereas, there is now in force a temporary arrange- 
 ment or agreement, embodied in a resolution of this body 
 which was adopted on the 26th day of October, 1909, and 
 accepted by the Detroit United Railway, between the city 
 of Detroit and the Detroit United Railway, whereby the 
 said Detroit United Railway is permitted to operate 
 street cars upon and along certain streets in the city of 
 Detroit upon the payment by the Detroit United Railway 
 to the city of Detroit of the sum of $300 per day, payable 
 weeKly, which said arrangement or agreement in no way 
 effects pending litigation and negotiations looking to a 
 permanent settlement of the differences between the city 
 of Detroit and the said Detroit United Railway. 
 
 Therefore, Be it Resolved, That in addition to all other 
 requirements, and in addition to said resolution adopted 
 the 26th day of October, 1909, and referred to commonly 
 as the "rental resolution," which was passed as a tem- 
 porary arrangement pending litigation and negotiation, 
 consent, permission and authority is hereby granted to
 
 115 
 
 the Detroit United Railway to continue from day to day 
 after the acceptance of this resolution, as hereinafter 
 designated, to operate its cars upon and along those 
 streets, avenues and portions of the same hereinafter set 
 forth, upon the following terms and conditions as to rate 
 of fare, to- wit: The rates of fare for a single ride for a 
 continuous trip in any one direction over any one of the 
 streets, avenues, or portions thereof hereinafter set out, 
 shall be 5 cents, for which the passenger shall be entitled 
 to such ride and to a ticket or transfer check to be given 
 to the passenger by the conductor on the car, good for a 
 ride over any intersecting line or route operated by said 
 Detroit United Railway, provided such ticket is presented 
 on the next regular car on such other route within 15 
 minutes after such passenger leaves the car on which he 
 paid the 5-cent fare and received such transfer check. 
 
 Said Detroit United Railway shall keep on all cars 
 operated pursuant to this resolution, between 5:15 a. m. 
 and 7 :30 p. m. of each day, tickets to be sold in strips or 
 packages of 8 for 25 cents, each of which tickets shall be 
 accepted by said Detroit United Railway for a single 
 fare in either direction over the line or street on which 
 it is presented, and which is hereinafter set out. 
 
 Said Detroit United Railway shall also keep on sale 
 on its cars operated in pursuance of this resolution, be- 
 tween the hours of 7:30 p. m. and 5:15 a. m. of each day, 
 tickets to be sold in strips or packages' of six tickets for 
 25 cents, each of which tickets shall be accepted' by the 
 said Detroit United Railway for a single fare in either 
 direction over the street or line on which it is presented, 
 and which is hereinafter set out in this resolution, and a 
 passenger presenting such a ticket shall be entitled to a 
 transfer good for a continuous ride over any other line 
 or route operated by said Detroit United Railway for the 
 same or lower rate of fare, as provided in this resolution,
 
 116 
 
 and intersecting the street or line of the car upon which 
 the passenger presented such ticket and requested such 
 transfer check. 
 
 The streets and avenues and portions thereof above re- 
 ferred to are described as follows, to-wit : 
 
 MICHIGAN AVENUE. 
 
 The north track from Woodward avenue to Rowland 
 street, and from Porter street to Livernois avenue; the 
 south track from Abbott street to Livernois avenue. 
 
 GRATIOT AVENUE. 
 
 On Monroe avenue the northwest track from Wood- 
 ward to Farmer, both tracks from Farmer to Randolph; 
 on Randolph from Monroe to Gratiot avenue; on Gratiot 
 from Randolph street to Sheridan avenue. 
 
 MACK AVENUE. 
 
 From Gratiot avenue to Baldwin avenue. 
 
 BAKER STREET. 
 
 On Brooklyn avenue from Porter street to Baker street ; 
 on Baker street from Brooklyn to Twenty- fourth street; 
 on Twenty-thrid street from Dix to Baker street; on Dix 
 
 from Twenty-third to Twenty-fourth street. 
 
 CHENE STREET. 
 
 On Atwater street, from Jos. Campau avenue to Cheue 
 street; on Chene street from Atwater street northerly to 
 Newton street. 
 
 BRUSH STREET. 
 
 On Brush street from Gratiot avenue to Rowena street ; 
 on Rowena street from Brush to St. Antoine street; ou 
 St. Antoine from Rowena to Farnsworth street; on 
 Farnsworth from St. Antoine to Russell street; on Rus- 
 sell street from Farnsworth northerly to the end of the 
 line.
 
 117 
 
 ATWATEE STREET. 
 
 From Woodward avenue to Brush street; on Brush 
 street from Atwater street to Jefferson avenue. 
 
 WOODWARD AVENUE. 
 
 From the railroad crossing southerly to Grand River 
 avenue and from Fort street west southerly to the river, 
 all tracks except one. 
 
 Be it further resolved that the common council reserves 
 the right to at any time repeal this resolution, and it is 
 understood that its passage by this body is not to alter 
 or amend or to be a substitute for the ordinance passed 
 at a session of the common council on the 3rd day of 
 March, 1908, and entitled, "An ordinance to provide for 
 the operation of cars by street railway companies oper- 
 ating cars on any street in which the franchise right has 
 expired," and that this resolution or agreement, if in ex- 
 istence at the time when the injunction issued by the 
 United States Cricuit Court for the Eastern District of 
 Michigan, Southern Division, in the case entitled Guaran- 
 ty Trust Company vs. City of Detroit et al., shall be modi- 
 fied or dissolved so as to permit the publication and en- 
 forcement of said ordinance, tkis resolution shall be null 
 and void, and all authority to act under it and the ar- 
 rangement made pursuant to it shall cease, and ,this reso- 
 lution shall likewise be of no force or effect unless con- 
 sent in writing is given hereto by the Detroit United 
 Railway and the Guaranty Trust Company of New York 
 within ten days after its passage. 
 
 Aid. Harpfer moved the adoption of the resolution. 
 
 Aid. Heineman moved to refer the matter back to the 
 Committee with instructions to ascertain from the rail- 
 way company if there is any probability of the company 
 accepting the resolution, which motion was lost as fol- 
 lows :
 
 118 
 
 Yeas Allan, Field, Freiwald, Garvej, Heineman, Keat- 
 ing, Koenig, Lempke, Vernor, Watson 10. 
 
 Xays Burton, Ellis, Glinnan, Goeschel, Grindley, Gut- 
 man, Harpfer, Konkel, Ostrowski, Owen, Reinhardt, Ro- 
 senthal, Rutter, Schulte, Shapland, Skrzycki, Thompson, 
 Tossy, Trevor, Walsh, Wing, Zoeller 23. 
 
 Aid. Rosenthal offered the following amendment: 
 
 Resolved, That the resolution be amended by adding 
 there to this proviso: 
 
 Be it further resolved, that the commissioner of public 
 works, be and he is hereby instructed in the event of the 
 refusal of acceptance to this resolution to notify the D. 
 U. R. to immediately remove its tracks from the streets 
 and if the company refused to comply within a reasonable 
 time that the commissioner do so and charge the expense 
 to the company. 
 
 The amendment w 7 as lost. 
 
 The question being on the motion of Aid. Harpfer, the 
 motion prevailed as follows: 
 
 Yeas Aid. Burton, Ellis, Freiwald, Garvey, Glinnan, 
 Goeschel, Grindley, Gutman, Harpfer, Konkel, Lempke, 
 Ostrowski, Owen, Reinhardt, Rosenthal, Rutter, Schulte, 
 Shapland, Skrzycki, Thompson, Tossy, Trevor, Walsh, 
 Wing, Zoeller and the president 26. 
 
 Nays Aid. Allan, Field, Heineman, Keating, Koenig, 
 Vernor and Watson 7.
 
 119 
 
 VII. 
 
 A municipal street grant does not establish the 
 technical relation of landlord and tenant, which exists 
 in the case of a private landlord and his private ten- 
 ant, and for two reasons : ( 1 ) the municipality, as the 
 alleged landlord, is a mere trustee for the public; 
 and (2) the company grantee, as the alleged tenant, 
 is under a legal obligation to serve the public. Hence, 
 whatever the contract between the muncipality and 
 the company may be, it is subject to the superior 
 and predominate rights of the public. 
 
 Street railway tracks are imbedded in the soil; they 
 usually consist of a cement foundation into which the 
 ties are imbedded ; the rails are spiked to the ties ; and the 
 ties, spike heads, and the lower flanges of the rails are 
 covered with cement or brickwork. The whole structure 
 becomes as much a part of the realty as any structure 
 known to the art of building, and it cannot be removed 
 without serious injury to the street and great inconven- 
 ience to the public. , 
 
 If the relation of landlord and tenant exists, witli 
 the municipality as landlord and the street railway com- 
 pany as tenant, the question would arise whether the 
 tracks are a fixture which can be removed by the tenant 
 at the expiration of the term. 
 
 There would be no doubt about the right of the tenant 
 to remove the tracks if no inconvenience and injury to 
 the traveling public would result. (Wiggins Ferry Co. 
 vs. Ohio, etc., R, Co., 142 U. 8. 396.)
 
 120 
 
 The injury to the public would be so great that it might 
 well be held that the street railway tracks cannot be re- 
 moved by the tenant; but it is certain, that the tracks 
 would remain the property of the street railway company, 
 and the city or its assigns could not take possession of 
 them. Such was the ruling of the Supreme Court of the 
 United States in Cleveland Electric Ry. Co., vs. Cleve- 
 land, 204 U. 8., 117-142. 
 
 In that case the laws of Ohio prohibited municipalities 
 from making street grants to street railway companies 
 for a longer period than twenty-five years, and the court 
 found that the Garden street grant expired March 22, 
 1905. 
 
 January 11, 1904, the common council of Cleveland 
 had made a grant of Garden street to a rival company, 
 known as the Forest City Railway Company, which grant 
 became operative March 22, 1905. One of the conditions 
 of the grant was that the grantee should pay to the 
 owners of the tracks, poles and the other property being 
 in the street, an amount to be agreed upon therefor or 
 such sum as should be finally adjudicated by a court. 
 
 The United States Circuit Court (137 Fed. Ill), held 
 that the grant made to the rival company was inoper- 
 ative so far as it assumed to confer any legal right to 
 take the tracks, poles, wires and appliances, as it would 
 be the taking of property without due process of law. 
 
 The rival company was, therefore, enjoined from inter- 
 fering with the complainant in the peaceable possession 
 of the property mentioned, and the city was enjoined 
 from attempting in any manner to put the rival company 
 into possession of the same. 
 
 Both parties appealed to the Supreme Court of the 
 United States, and that court in affirming the decree be- 
 low said:
 
 121 
 
 "Upon the appeal of the defendants, we think little 
 need be said. The defendants insist that, upon the term- 
 ination of the grant to the Garden street branch, the 
 rails, poles and other appliances for operating that road, 
 and then remaining on the various streets, became the 
 property of the city or at least that the city had the 
 right to take possession of the streets and of the rails, 
 cracks, etc., therein existing. , We agree with the court 
 below in the opinion that the title to the property re- 
 mains in the railroad company which had been operating 
 the road, and we are of opinion that The Forest City 
 Railway Company had no rights in the streets, so far as 
 affect the right of the complainant to its property then 
 existing in such streets. How that property may be dis- 
 j>ox(><l ttf j'.v not now a matter before tlilx court. \Vc 
 only hold that the defendant company cannot avail itself 
 of the provisions of the ordinance of January 11, 1904, 
 so fas as taking possession of the property of the com- 
 plainant is concerned."* 
 
 That decision left the Cleveland Electric Railway 
 Company in possession of the street railway on Garden 
 street with a perpetual injunction enjoining the defend- 
 ants from taking possession of the property, except by 
 some due process of law. 
 
 It is evident that the only way the Cleveland Electric 
 could have been dispossessed was by condemnation proceed- 
 ings. If the defendants had no authority to condemn 
 street railway property to the public use they would 
 
 District Judge Tayler in the court below held that the Garden street grant expired 
 Mar. 22, 1905, but he did not undertake to determine what the rights and remedies 
 of the parties might be, if the City undertook to dispossess the company; and in the 
 short opinion delivered when the final decree was entered he concluded with this 
 significant comment. 
 
 "The court holds that the Forest City Railway Company has no more rights in 
 the streets than the complainant, and not so many, because the complainant's prop- 
 erty is there; and this property, if removed by the city, must be removed in some 
 way that corresponds tinth the properties of the /air." (Printed Record, p. 275, IN 
 Supreme Court of United States in Cleveland Electric Ry. Co. vs. City of Cleveland. 
 204 U. S., 116.
 
 122 
 
 have had to wait until they got such authority from the 
 state legislature, under the power to amend, alter or re- 
 peal, as in Greenwood vs. Union Freight R. R. Co., 105 
 U. 8. 13. 
 
 The Cleveland Electric Railway Company was engaged 
 in a controversy with the city of Cleveland, concerning 
 its whole system, and presumptively for tactical reasons 
 it took up its railway tracks on Garden street and re- 
 moved its poles and wires, and wholly abandoned the 
 street, giving the city complete and undisputed control. 
 
 In a subsequent chapter I will show that in doing this 
 the company was guilty ot a great strategical blunder. 
 
 Again, if the relation of landlord and tenant exists, 
 with the city as landlord and the street railway company 
 as tenant, both are subject to the rule of law, that if the 
 tenant holds over after the expiration of his term, the 
 landlord is at liberty to treat him as a trespasser and 
 by a proper legal proceeding to eject him from the prem- 
 ises, or he can recognize the tenancy, by accepting rent, 
 or other equivalent action, and hold the tenant for an- 
 other term, at the same rent, and the other conditions 
 of the original lease. 
 
 In this view of the case the two per cent on its gross 
 receipts, the Detroit United Railway is required by its 
 contract with the city, to pay into the city treasury 
 semi-annually, must be regarded as rent, and if the city 
 accepts the percentage on gross receipts after November 
 14, 1909, it will renew, the lease for another term of 
 thirty years, on the old terms and conditions. 
 
 I do not believe that any such consequence would re- 
 sult from an acceptance of the percentage, but it would 
 be inevitable if the relation of landlord and tenant is 
 held to exist.
 
 123 
 
 The fundamental reason why a street grant to a pub- 
 lic utility corporation is not a lease, and does not create 
 n tenancy, is that the city has no private ownership of 
 the streets, but is a mere trustee for the general public, 
 and its control of the streets, is for the purpose of im- 
 proving them and keeping them in good order and con- 
 dition for the passage of persons and vehicles. 
 
 The actual owner, the real landlord (if there is one), 
 is the general public, which consists of the vast multitude 
 and concourse of persons who make use of the street 
 railways. Over 100,000,000 passengers ride on the De- 
 troit street railways in a year. A rough estimate of a 
 1000 rides per year for each family, and 5 persons a 
 family, shows that a population (including visitors from 
 without the city) of 500,000 persons make use of the 
 street cars as the most convenient and expenditious way 
 of traveling from one point in the city to another. 
 
 This general public insists on a continuation of the 
 service, and its action in continuing after November 14, 
 1909, to ride on the cars, is entitled to more potency 
 to continue the tenancy (if there is one), than any ac- 
 tion the common council may take. 
 
 There are three parties to these street grants, the 
 municipality, the street railway company, and the state 
 as the representative of the general public. 
 
 The state authorizes the company to make use of the 
 streets with the local consent, and. that consent having 
 been once given it can not be withdrawn. 
 
 The state permits the local authorities to make rules, 
 regulations and conditions, and agreements fixing rates 
 of fare, and permits the local authorities to limit the 
 duration of the same, but it nowhere permits them to 
 limit the duration of the consent and permission granted.
 
 124 
 
 Tlio state assumes that in the absence of lawful local 
 action, its own general laws will be ample to protect its 
 own beneficiary, the general public. 
 
 That the interests of the public prevent a street grant 
 for a term of years from being considered the same as 
 a lease of real estate between private parties, is abun- 
 dantly settled by the authorities. 
 
 If a land owner should rent to a railroad company a 
 strip of land for a right of way, and the ties and rails 
 laid thereon became a component part of the railroad, 
 the landlord could not at the expiration of the term, 
 maintain ejectment for the strip of land, and dispossess 
 rhe railroad company; nor could he maintain an action 
 of trespass. His only remedy would be an action for 
 compensation. 
 
 He could apply for an injunction, but if the company 
 had the power of condemnation, the injunction would 
 not be issued pending proceedings to condemn; and if 
 the company did not have the power of condemnation 
 the injunction would not be issued, if the company 
 promptly paid such compensation as the court, by a 
 proper proceeding, determined to be adequate. 
 
 The authorities on this subject were reviewed by the 
 Supreme Court of the United States in an instructive 
 opinion by Mr. Justice Brewer, in the interesting case 
 of New York City vs. Pine, 185 U. 8. 93. 
 
 In that case the city of New York had no power to 
 condemn property in Connecticut, which was being dam- 
 aged by the construction by the city of a water w r orks 
 dam, in the state of New York, on a river which flowed 
 into the state of Connecticut and back into the State of 
 New York. Connecticut landowners filed a bill in the 
 Circuit Court of the United States for the Southern Dis-
 
 15 
 
 trict of New York, for an injunction restraining the city 
 from maintaining the dam. 
 
 The Circuit Court suspended its decree from June 27, 
 1900, to November 1, 1900, to enable the parties to come 
 to an agreement; which they failed to do. 
 
 Thereafter, no agreement having been made, a decree 
 was entered as follows: 
 
 "That the complainants in this suit and each of them 
 are entitled to an injunction order of this court restrain- 
 ing the defendant, its successors and assigns, their and 
 its officers, agents and employes, each, all and any of 
 them, from diverting the water or any part of the 
 water of the West Branch of the Byram River or any 
 part of the water of the Byram Kiver, or in preventing 
 in any way said water or any part thereof at any time 
 from flowing through its natural channel, before, at and 
 below the junction of the two branches of said river; and 
 
 "It is further ordered, adjudged and decreed that the 
 defendant, its successors and assigns, their and its offi- 
 cers, agents and employes, each, any and all of them, be 
 and they and each of them are hereby perpetually en- 
 joined from diverting the water or any part of the water 
 of the West Branch of the Byram River, or any part of 
 the water of the Byram River, or in preventing in any- 
 way said water or any part thereof at any time from 
 flowing through its natural channel, before, at and be- 
 low the junction of the two branches of said river."' 
 
 On appeal to the Circuit Court of Appeals for the 
 Second Circuit this decree was, on October 30, 1901, af- 
 firmed by a divided court. 
 
 On a review of the case by the Supreme Court of the 
 United States, that court took into consideration the
 
 126 
 
 general subject, but confined its actual decision to the 
 neglect of the complainants to file their bill, until the 
 dam was nearly completed. 
 
 The opinion of the court concludes as follows: 
 
 "On that ground alone, and without deciding whether 
 plaintiffs have a legal right to recover damages, the 
 decrees of the Circuit Court of Appeals and the Circuit 
 Court will be reversed and the case remanded to the lat- 
 ter court, with instructions to set aside its decree and to 
 enter one providing for an ascertainment, in the way 
 courts of equity are accustomed to proceed, of the dam- 
 ages, if any, which the plaintiffs will suffer by the con- 
 struction of the dam and the appropriation of the water, 
 and for which the defendant is legally responsible, a 
 proposition upon which we express no opinion, and fix- 
 ing the time within which the defendant will be required 
 to pay such sum, and that upon the failure to make such 
 payment an injunction will issue as prayed for; and, on 
 the other hand, that upon payment, a decree will be 
 entered in favor of the defendant. If the plaintiffs shall 
 prefer to have their damages assessed by a jury, leave 
 may be given to dismiss the bill without prejudice to au 
 action at law." 
 
 Justice Brewer, in stating the case, made these com- 
 ments, which are directly applicable to the attitude of 
 the city of Detroit in regard to the expired street grants 
 held by the Detroit United Railway: 
 
 "This is not a case between two individuals in which 
 is involved simply the pecuniary interests of the respec- 
 tive parties. On the one side are two individuals claim- 
 ing that their property rights are infringed rights which 
 can be measured in money, and that not a large sum;
 
 127 
 
 on the other, a municipality undertaking a large work 
 with a view of supplying many of its citizens with one 
 of the necessities of life. According to the averments 
 in the bill the city had been engaged in this work, and 
 it stands as an admitted fact that for two years prior to 
 the commencement of this suit the work had been under 
 way. It is true the testimony discloses that the plain- 
 tiff and the city had been trying to agree upon the 
 amount of compensation, but that shows that the plain- 
 tiffs were seeking compensation for the injuries they 
 would sustain, and were not insisting upon their alleged 
 right to an abandonment of the work. It is one thing to 
 state a right and proffer a waiver thereof for compensa- 
 sation and an entirely different thing to state the same 
 right and demand that it should be respected. In the 
 latter case the defendant acts at his peril. In the former 
 he may ivell assume that payment of a just compensation 
 ivitt be accepted in lieu of the right. In the latter the 
 plaintiff holds out the single question of the validity and 
 extent of the right; in the former he presents the rii/lit 
 as the foundation of a claim for compensation, and lii* 
 threat to enforce the right., if compensation i-s not made 
 is simply a club to compel payment of the sum he deems 
 the measure of his damages. Further, the testimony 
 shows that the city was settling with other parties simi- 
 larly situated, and paying out large sums of money for 
 the damages such parties would sustain. So, it is not 
 strange that the city acted on the assumption that the 
 only matter to be determined was the amount of the com- 
 pensation." 
 
 "If the plaintiffs had intended to insist upon the strict 
 legal rights (which for the purposes of this case we as- 
 sume they possessed), they should have commenced at 
 once, and before the city had gone to expense, to re- 
 strain any work by it. It would be inequitable to per-
 
 IL'S 
 
 mit them to carry on negotiations with a view to com- 
 pensation until the city had gone to such great expense, 
 and then, failing to agree upon the compensation, fall 
 back upon the alleged absolute right to prevent the 
 work. If they had intended to rest upon such right and 
 had commenced proceedings at once, the city might have 
 concluded to abandon the proposed undertaking and 
 seek its water supplies in some other direction. If this 
 injunction is permitted to stand the city must pay what- 
 ever the plaintiffs see fit to demand, however extortionate 
 that demand may be, or else abandon the work and lose 
 the money it has expended. While we do not mean to 
 intimate that the plaintiffs would make an extortionate 
 demand, we do hold that equity will not place them in 
 a position where they can enforce one." 
 
 The opinion quotes approvingly from the opinion of 
 the Supreme Court of Georgia in Charleston Railway Co. 
 vs. Hughes, 105 Ga. 1, where Justice Cobb said: 
 
 "When a railroad company, without warrant or author- 
 ity, enters upon the land of another, it is as a general rule 
 no less a trespasser than any other person who is guilty 
 of an act of a similar nature. If, however, a railroad 
 company enters upon the land with the consent of the 
 owner, or under license from him, the property thus 
 taken. possession of becomes such a necessary component 
 part of its railroad that to surrender its possession would 
 interfere seriously with the interests of the company. 
 The landowner, although entitled to compensation for 
 his property, might by his conduct in allowing the entry 
 upon his land and permitting the company to so use it 
 as that it could not be abandoned without great preju- 
 dice to its rights, estop himself from asserting against 
 the company the legal title to the property by an action
 
 129 
 
 of ejectment. The propositions above stated are simply 
 the application of familiar principles of law which gov- 
 ern in all transactions of the character above referred 
 to, whether the controversy be between natural persons 
 alone, or between such persons and corporations, and 
 whether the corporation be public or private. A rail- 
 road corporation, being one charged by the law with tin 
 performance of certain <lntirx to the public, is allowed, 
 under some circumstances, to set up rights connect <d 
 ir-ith the land over which it operates its line or railirm/. 
 of which an individual or an ordinary private corpora- 
 tion would not generally be allowed to avail itself. Con- 
 troversies in reference to possession of land, where the 
 rights of individuals only are involved, are purely mat- 
 ters of private concern. Controversies in which a cor- 
 poration charged with the duties incumbent upon car- 
 riers of passengers, freight and mails, in which an effort 
 is made by private individuals or others to take away 
 from such corporation a part of the property in its pos- 
 session, which is absolutely essential to its complete per- 
 formance of the public duties required of it, become mat- 
 ters of more than private conce"-n, and in which the pub- 
 lic is deeply and seriously interested. For this reason 
 it has become settled law that the harsh remedies which 
 would be allowed to one individual against another in 
 reference to the possession of land will not be allowed to 
 one who is seeking to recover such property from a rail- 
 road company, when exact justice can be done to such 
 owner by giving him remedies .vhich are less severe in 
 their nature, and by which he \ruld secure substantially 
 the same rights, thereby saving to the public the right 
 to require a performance of the public duties incumbent 
 upon the corporation whose property is the subject mat- 
 ter of the controversy. That a railroad corporation has 
 a right to deprive a person of his property for its uses
 
 130 
 
 by doing acts which in an individual would be dealt 
 with as a trespass is not contended for; but when a rail- 
 road company enters upon land and constructs its road 
 without lawful authority, and the land owner acquiesces 
 in the wrongful act, and the consequent appropriation of 
 the property to a great public use until the same has be- 
 come a necessary component part of the property re- 
 quired by the railroad to perform its public duties, such 
 land owner will be held to have waived his right to re- 
 take the property., and will be remitted to such other 
 remedies for the wrong done him as will not interfere 
 with the rights of the public to have the railroad main- 
 tained and operated." 
 
 Such is the law everywhere. 
 
 The Supreme Court of the United States has had oc- 
 casion to examine the state decisions in railroad cases, 
 and to fully concur in the views expressed by the Sup- 
 reme Court of Georgia. (Roberts vs. Northern Pac. R. 
 R. Co., 158 U. S. 1, 11; Northern Pac. R. R. Co. vs. 
 Smith, 171 U. 8. 260; Donohue vs. El Paso, etc., R. R. 
 Co., 214 U. 8. 499.) 
 
 The state decisions cited are (Lexington & Ohio Rail- 
 road vs. Ormsby, 7 Dana 276 ; Harlow xs. Marquette, etc.. 
 Railroad, 41 Mich. 336; Cairo & Fulton Railroad vs. Tur- 
 ner, 31 Ark. 494; Pettibone vs. LaCrosse, etc., R. R., 14 
 Wis. 443; Chicago & Alton Railroad vs. Goodwin, 111 
 III. 273; McAuley vs. Weston, etc., R. R., 33 Vt. 311; 
 Provolt vs. Chicago, etc., R. R., 37 Mo. 256; Omaha, etc., 
 R. R. vs. Redick, 16 Neb. 313; Kanaga vs. Railway Co.. 
 76 Mo. 207; Dodd vs. St. Louis, etc., R. R., 108 Mo. 581; 
 Evansville, etc., R. R. vs. Nye, 113 Ind. 223.)
 
 131 
 
 The Supreme Court of the United States (171 U. S. 
 273), quotes approvingly from the opinion of Chief Jus- 
 tice Redfield, in the Vermont case. (33 Vt. 311.) 
 
 "In these great public works the shortest period of clear 
 acquiescence, so as fairly to lead the company to infer that 
 the party intends to waive his claim for present payment, 
 will be held to conclude the right to assert the claim in 
 any such form as to stop the company in the pro- 
 gress of their works, and especially to stop the running 
 of the road after it has been put in operation, whereby 
 the public acquire an important interest in its continu- 
 ance. The party does not, of course, lose his claim or 
 the right to enforce it in all proper modes. He may pos- 
 sibly have some rights analogous to the vendors lien in 
 England, and here until the legislature cut it off. But 
 it is certain, according to the English decisions, that he 
 cannot stop the work, especially the trains upon the road, 
 if he has, in any sense, for the shortest period, clearly 
 given to the company, either by his express consent, or 
 by his silence, to understand that he did not intend to 
 object to their proceeding with the construction and oper- 
 ation. * * * If there was then a waiver, in fact, 
 either express or implied, by acquiescence in the proceed- 
 ings of the company, to the extent of not insisting upon 
 payment as a condition precedent, but consenting to let 
 the damages be and remain a mere debt, with or without 
 a lien upon the roadbed, as the law may turn out to be, 
 then it is impossible to regard the defendants in any 
 sense in the light of trespassers or liable in ejectment." 
 
 It appears from the foregoing review of the authorities 
 that a trespass committed by a railroad company in tak- 
 ing possession of land to devote it to a public use, is 
 judged on a different basis than a trespass committed by 
 a private party for his own private purposes. In such a
 
 132 
 
 case the rightful owner is entitled to regain the posession 
 by ejectment, and to recover his damages. In the case of 
 a railroad company the lawful owner is not entitled to 
 maintain ejectment; he can only recover compensation 
 for his land either by an action at law, or by a bill in 
 equity praying for an injunction and other relief. 
 
 A railroad company holding possession of land after 
 the term for which it was demised and let to it, is cer- 
 tainly in a more favorable position, than if its original 
 entry into possession was wrongful; and it follows that 
 a railroad company when it holds possession of land be- 
 yond the term of its lease, cannot, even if regarded as a 
 trespasser, be ejected by any process known to the law. 
 
 This doctrine has not been confined to actions of eject- 
 ment and bills to enjoin the further operation of the 
 railroad over the property trespassed upon. 
 
 At the common law improvements made by one upon 
 the land of another without his consent, even if made in 
 perfect good faith, became the property of the owner of 
 the soil. The rule of the civil law was more liberal and 
 allowed one who had made the improvements on land in 
 his possession under the bona fide belief that he was the 
 owner of it, to exact compensation for the value of such 
 improvements', less the value of the use of the land, before 
 he could be compelled to surrender it. 
 
 The rigid rule of the common law has been somewhat 
 modified in cases where the improvements were made in 
 good faith. The history of these modifications is given 
 by Dillon, J., in Parsons vs. Moses, 16 Id. 444. 
 
 The first modification was by the court of chancery 
 when it was held that if for any reason the real owner 
 was compelled to seek equitable relief he would be re- 
 quired to pay for the improvements so far as they had 
 permanently enhanced the value of the property.
 
 133 
 
 Courts of law next modified the strict rule of the com- 
 mon law to this extent that where the real owner brought 
 his action for mesne profits the bona fide occupant might 
 set off or recoup the value of his permanent improve- 
 ments to the extent of the rents and profits, but no fur- 
 ther. 
 
 Eventually statutes were passed in all or nearly all the 
 American states providing that the unsuccessful defend- 
 ant in ejectment should be allowed compensation for his 
 improvements provided he occupied the property under 
 color of title and in good faith, or his possession had been 
 so long continued as to indicate good faith. 
 
 These statutes were found to be subject to constitu- 
 tional restrictions, for if they went too far they would 
 violate constitutional guaranties. (Childs vs. Shower, 
 18 la. 261, 267; Madland vs. Benland, 23 Minn. 372, 379; 
 McCoy vs. Crandy, 3 Ohio St. 463.) 
 
 In Indiana the courts have refused to apply the statute 
 of 'betterments to structures wrongfully placed upon the 
 property of a private owner by a railroad company, and 
 in subsequent condemnation proceedings have allowed the 
 property owner to recover the value of the improvements 
 as constituting a part of the property belonging to him. 
 In California this ruling has been applied to a lighthouse 
 wrongfully built by the government on the land of a per- 
 son without his consent. And in New York it has been 
 applied to a reservoir and pipes for water works wrong- 
 fully constructed by a village on private property before 
 condemning it to the public use. (Graham vs. Conner- 
 mile, etc. R. R. Co., 36 Ind. 463; United States vs. Land 
 in Monterey County, 47 Cal. 515; St. John son viUe vs. 
 Smith, 184 N. Y. 341.)
 
 134 
 
 But the great weight of authority including the Michi- 
 gan decisions in railroad cases are the other way. (Mor- 
 gan's Appeal, 39 Mich. 675; Toledo, etc. R. R. Co. vs. 
 Dunlap, 47 Mich. 456; Justice vs. Nesquehoning R. R. 
 Co., 87 Pa. St. 28; 2 Lewis on Eminent Domain (3rd Ed.) 
 347, ca. ci. n. 68.) 
 
 The Pennsylvania case has been approvingly quoted 
 from by the Supreme Court of the United States (171 
 U. 8. 273), as follows: 
 
 "This is not the case of a mere trespass by one having 
 no authority to enter, but of one representing the state 
 herself clothed with the power of eminent domain, hav- 
 ing a right to enter, and to place these materials on 
 the land taken for a public use materials essential to 
 the very purpose which the state has declared in the 
 grant of the charter. It is true the entry was a trespass, 
 by reason of the omission to do an act required for the 
 security of the citizen, to-wit, to make compensation or 
 give security for it. For this injury the citizen is 
 entitled to redress. But his redress cannot extend be- 
 yond his injury. It cannot extend to taking the personal 
 chattels of the railroad company. They are not his and 
 cannot increase his remedy. The injury was to what 
 the landholder had himself, not to what he had not. 
 Then why should the materials laid down for the benefit 
 of the public be treated as dedicated to him? In the 
 case of a common trespasser the owner of the land may 
 take and keep his structures, nolens volens, but it is 
 not so in this case; for though the original entry was a 
 trespass, it is well settled, that the company can proceed, 
 in due course of law, to appropriate the land, and conse- 
 quently to reclaim and avail itself of the structures laid 
 thereon."
 
 135 
 
 The only reason that has ever been advanced for mak- 
 ing a distinction between structures wrongfully built by a 
 railroad company on the land of another, and structures 
 built by a private trr /passer, is the public nature of rail- 
 road property, and the power possessed by railroad com- 
 panies to condemn property to the public use on the pay- 
 ment of just compensation. 
 
 In the Dunlap case I made out a case of bad faith by 
 showing that the railroad company made its entry under 
 a fraudulent service of process. (46 Mich. 190.) 
 
 But the court would have none of it ; and Judge Camp- 
 bell, speaking for the court, said that to apply the rule for 
 which I contended to the case before the court would be 
 absurd, and not good sense; and that was the language of 
 a judge who was noted for the tenacity with which he 
 upheld private rights. 
 
 The public purposes for which railroad companies are 
 incorporated adds to the law of implied contracts; modi- 
 fies the law of landlord and tenant; qualifies the law gov- 
 erning actions of trespass and ejectment; limits the title 
 of private owners of land, to less than they would pos- 
 sess, as against private trespassers; and liberalizes the 
 rule of strict construction. It is summed up in the 
 maxim : "The public welfare is the supreme law." 
 
 Comparing this principle of law, which we have found 
 to be so well settled with the case of the Detroit United 
 Kailway, we are taught that it is directly applicable 
 thereto. 
 
 (1) The street railway property of the company has 
 been kept in as good condition as at any period of its
 
 136 
 
 history, up to the very last day of the expiring local 
 grants; and since the grants expired the excellent service 
 the company renders the public has continued undimin- 
 ished and impaired. 
 
 (2) The city of Detroit neither before or since Novem- 
 ber 14, 1909, has given any notice that it will insist on 
 dispossessing the company of the streets covered by the 
 expired grants. 
 
 (3) The tracks on the streets in question are a com- 
 ponent part of street railway routes which are of much 
 greater length, and which are in part used by the inter- 
 urban lines of the company, some of which are sixty miles 
 long and none less than twenty miles. 
 
 (4) Instead of taking steps to eject the company from 
 the portions of the streets in question, the common coun- 
 sel of the city has passed the Hally ordinance of March 
 3, 1908, and the Heinernan resolutions of October 19 and 
 26, 1909, and the Glinnan resolution of December 14, 1909, 
 set forth in another subdivision of this brief, thereby put- 
 ting the city into a position where it is forever barred 
 from ousting the street railway company from the streets. 
 
 (5) The city can file a bill in equity in which it can 
 allege that the three-cent fares proposed by the Hally or- 
 dinance and the Glinnan resolution are reasonable and 
 sufficiently remunerative to escape being confiscatory, but 
 it can not get any injunction or other process to dis- 
 possess the company, if the company can show and the 
 court finds, that the fares proposed are not reasonable. 
 
 (6) In that way the question of reasonableness will 
 become a judicial question, to be determined by the courts 
 of justice the same as other legal controversies.
 
 137 
 
 State vs. Cincinnati (las Light & Coke Co., 18 Ohio 8t. 
 262 concerned the use of the streets of the city by a gas 
 company under a contract entered into in 1841 between 
 the city and James F. Conover and his associates, their 
 heirs, assigns and successors. 
 
 At page 291, the court made this ruling : 
 
 "We think it cannot be doubted, that the right to use 
 the streets of a city for the purpose of laying pipes to 
 convey gas, whether in the hands of a private corporation 
 or a natural person, is a franchise, and as such can only 
 emanate directly or indirectly from the sovereign power 
 of the state. And the position that the city council of 
 Cincinnati in making the contract with Conover is to be 
 regarded as a private corporation, granting an easement 
 in its own property, can not be maintained. In one sense 
 and to a certain extent the streets may be said to belong 
 to the city. But as highways, the public have an interest 
 in them, the owners of adjoining lots have a special prop- 
 erty interest in them, and the city council can not change 
 the character of the public use to which they may have 
 been dedicated by the original proprietors. Wherever the 
 statute may have, from time to time, provided that the 
 fee in the streets shall be considered as being vested, it has 
 always declared that it shall be so vested for the uses of 
 the dedication. Whatever powers of supervision and con- 
 trol the legislature may have conferred upon the city 
 council for the purpose of rendering the enjoyment of the 
 public easement or use more convenient amj beneficial, or 
 with a view to the safety health, convenience, or comfort 
 of the inhabitants of the city, these powers are all of a 
 public municipal character, and their exercise is quite dif- 
 ferent from the acts of a private corporation dealing, at 
 its discretion, with property over which it mai/ 
 all the rights incident to absolute ownership."
 
 138 
 
 It appeared in above case that in 1853 the legislature 
 gave the city council general legislative authority to fix 
 the price of gas in Cincinnati, and that in 1854 the city 
 council was authorized to make ten year contracts with 
 the gas company. 
 
 The court, at page 299, said : 
 
 "The act of 1853 authorized city councils, from time to 
 time, to regulate, by ordinance, the price at which gas 
 companies should furnish gas, and under this authority 
 the price of gas might be changed as often as the council 
 might think proper. The act of 1854 provided a mode by 
 which stability might be given to prices for a period not 
 exceeding ten years, and gas companies be secured against 
 any change of price to their prejudice during such period. 
 This object might be effected by an ordinance fixing the 
 price for a definite period, which should have the effect 
 of a contract, when assented to by written acceptance of 
 a gas company. But if no such assent were given by the 
 company, the ordinance would still remain valid as such, 
 and be subject to modification by the council as before. 
 An acceptance by the company would bind the council not 
 to lower the price during the period specified in the ordi 
 nance, but a failure to accept would not affect the valid- 
 ity of the ordinance, but would leave the council free and 
 untrammeled in the exercise of the power conferred by 
 the act of 1853." 
 
 Further on at page 301: 
 
 "The intention of the legislature in the 30th section of 
 that act was to require incorporated gas companies, over 
 whose charter it had the power of absolute control, to dis- 
 pose of the gas which they might furnish for public or 
 private use, at fair and reasonable prices. As such prices 
 might vary, with change of times and locality, the act pro- 
 vides for their ascertainment from time to time, through 
 
 C7
 
 139 
 
 the agency of the city councils of the cities in which such 
 companies might be established. The discretionary power 
 given by the act to city councils, might have been vested 
 elsewhere, but wherever vested, the gas companies whose 
 property interests are so vitally affected by it, have a 
 right to demand that it shall be honestly exercised for the 
 purpose for which it was given. Suppose the purpose and 
 object to be accomplished by the passage of this ordinance, 
 as alleged in the rejoinder, had been avowed by a pre- 
 amble, and the price of gas had been fixed by its pro- 
 visions at twenty-five cents per thousand cubic feet, could 
 this court be called upon to declare any of defendant's 
 franchises or rights forfeited by non-compliance with the 
 requirements of such an ordinance? Both public and pri- 
 vate rights are to be protected, and for that purpose we 
 must recognize the fact that a municipal as well as a pri- 
 vate corporation can do wrong."
 
 140 
 
 VIII. 
 
 The correct construction of the Michigan street 
 railway act is, that the "consent" of the local authori- 
 ties, is in its nature perpetual; that the local authori- 
 ties are given power to fix the rules, regulations and 
 conditions on which they will grant their consent and 
 to agree with the grantee on the rates of fare, and 
 may limit the duration of their contract, but can not 
 put a time limit on the local "consent;" and that at 
 the expiration of any period of time agreed upon, 
 the grantee, its successors or assigns, may continue 
 to occupy the streets, subject to such rules, regula- 
 tions and conditions and rates of fare as the law 
 (in the absence of local agreement) imposes. 
 
 Under the constitution of 1850 the legislature could 
 authorize public utility corporations to make use of the 
 streets without requiring the consent of the localities. 
 This was done in the case of telegraph and telephone com- 
 panies and it was sustained by the Supreme Court. 
 (Mich. Telephone Co. vs. St. Joseph, 121 Mich. 502; Mich. 
 Telephone Co. vs. Benton Harbor, 121 Mich. 512.) 
 
 The court held that such legislation did not deprive 
 municipalities of their police powers, and while they 
 could not prohibit the erection of telegraph and telephone 
 poles along their streets, they could adopt and enforce 
 reasonable regulations. 
 
 Kequiring the local assent in the case of street rail- 
 ways, gas works, and some other public utilities, relates 
 to their inception and original location in the streets; 
 but after any such utility has been once located and con-
 
 141 
 
 structed, there is no reason why a further consent on the 
 part of the municipality should be necessary to authorize 
 their continued existence in the streets. 
 
 Gas and water mains and pipes are laid deep in the 
 ground, and the cost of taking them out would be more 
 than they would be worth. Is it possible that at the ex- 
 piration of the local contract, gas and water mains and 
 pipes would be regarded in law as dead property, of no 
 value whatever, at the will of the local authorities, and 
 the entire investment therein, a total loss. 
 
 A construction of the street railway act which has any 
 such result, would be in violation of all the rules of in- 
 terpretation resorted to and relied upon by the courts, in 
 their efforts to ascertain and declare the true meaning of 
 legislative enactments. 
 
 Giving the consent of the municipality and designating 
 the streets on which the street railway is to be con- 
 structed, is an act separate and distinct from that of fix- 
 ing the terms and conditions of the grant. The one is the 
 act of consenting to the use of the streets named, during 
 the corporate life of the grantee, and of its assigns and 
 successors, and the other is the act of fixing the terms 
 and conditions, a time limitation on which has no neces- 
 sary connection with or effect on the consent, as that, in 
 its nature and purpose, is designed to be permanent and 
 perpetual. 
 
 The two acts 1 on the part of the municipality might well 
 be held to go hand in hand, and to be inseparably con- 
 nected, like the Siamese Twins, if at the expiration of the 
 time limit placed on the terms and conditions and rates 
 of fare, no rates of fare or terms and conditions were 
 to exist, and the street railway company was to be at lib- 
 erty to do as it pleased; but that is not the case, as the 
 company would still be bound by such rates of fare and
 
 142 
 
 other terms and conditions as the common law or the 
 statutory law of the state imposes upon common carriers. 
 
 The object of the street railway addition of 1861 to the 
 tram railway act of 1855, and of the general street rail- 
 way act of 1867 was not to hamper, obstruct or impede, 
 the construction of street railways; nor was it intended 
 to authorize the local authorities to agree to terms and 
 conditions and rates of fare, that would in the then un- 
 developed condition of the street railway business, be ex- 
 cessive and unreasonable. 
 
 The correct view of this legislation is that the object 
 sought to be accomplished was to give the local authori- 
 ties such power in the premises as would enable them to 
 hold out inducements, and to make such permanent ar- 
 rangements for such period of time as might be agreed 
 upon, as would lead private capital to construct and oper- 
 ate street railways. 
 
 To illustrate: Suppose in 1862, or in 1879 it had been 
 suggested that at the end of the thirty years, the city 
 might destroy the street railway in either one of two 
 ways, by compelling the company to remove from the 
 streets, or by imposing upon it such low rates of fare or 
 such onerous other terms and conditions, that the opera- 
 tion of the street railway would be financially unprofit- 
 able, can there be any doubt, as I have hereinbefore con- 
 tended, but that the city would have promptly agreed 
 that at the expiration of the thirty years the company 
 should be entitled to continue in the streets on reasonable 
 terms and conditions and rates of fare to be agreed upon, 
 or to be adjudicated upon by the courts. 
 
 All I contend for is that such an understanding is a 
 fair implication if any consideration whatever is to be 
 given to the interests and rights of the state as the rep-
 
 143 
 
 resentative of the public and as the third party to the 
 contract. 
 
 The merit of this construction is that it puts an end 
 to street railway wars and the municipal agitation and 
 disturbance incident thereto. 
 
 An intermittent street railway war has prevailed in 
 Detroit since 1891, and similar strife has prevailed in 
 some of the cities of Ohio for a number of years. I will 
 give some account of these further on. 
 
 In Detroit and Cleveland the strife has been over expir- 
 ing grants and the rates of fare to be subsequently im- 
 posed. In both the popular cry has been for three-cent 
 fares, and this demand has been steadily resisted by the 
 companies concerned, with no tribunal and no means of 
 settling the dispute, except an appeal to the electors of 
 the municipality, who constitute the constituency of the 
 local authorities, thus presenting the spectacle of one of 
 the three parties to the controversy, acting as the final 
 arbiter, fully clothed with the authority to hear the case 
 and pass judgment on its own cause. 
 
 And yet we are told this is the law. Could anything be 
 more absurd or unjust? 
 
 If my construction of the Michigan statute is correct, 
 when a local contract has expired, and the local authori- 
 ties and the company can not agree upon a renewal or a 
 new grant, the city can file a bill to have it determined by 
 the court whether the fares charged by the company are 
 reasonable, with a certainty that both of the parties would 
 be given a full and fair hearing, and that equal and exact 
 justice would be done. If the courts in this country do 
 not exist for such a purpose, what are they for? They 
 have jurisdiction of all kinds of controversies, great and 
 small, for the very purpose of having a peaceful method of 
 settling the rights and remedies of litigants; aud it is a
 
 144 
 
 time honored maxim of the law that no man shall be the 
 judge of his own case. 
 
 The only answer to this argument so far suggested, is 
 that the electors of the city of Detroit will decide for 
 themselves what the rates of fare shall be, and that they 
 will not submit to the interference of the judges. 
 
 While it is true, the courts have no jurisdiction by the 
 exercise of either legislative or executive power, to fix 
 rates of fare, yet they have undoubted authority to deter- 
 mine whether a rate of fare fixed by a legislature, a city, 
 or by a street railway company is reasonable or not. 
 
 The common council of the city of Detroit has never 
 been given any legislative power to fix rates of fare. The 
 acts of the legislature limit the power of the local authori- 
 ties to the making of mutual agreements with street rail- 
 way corporations concerning the rates of fare, and in the 
 absence of such an agreement, a street railway company 
 can fix its own rates of fare, but subject always to the 
 power of the courts to determine on the facts and the law, 
 whether the rates of fare charged by the company are 
 reasonable or otherwise. 
 
 All statutory construction has for its object the dis- 
 covery of the intention of the legislature. If the statute 
 is valid, the intention of the legislature absolutely con- 
 trols. 
 
 The rule of strict construction, in all cases where it 
 applies, is a valuable rule, having for its object,, in the 
 case of grants of power, rights or privileges to either pri- 
 vate or public corporations, the protection of the public 
 interests. 
 
 When the rule would result in injury to the public, it 
 is relaxed and a more liberal construction adopted. In- 
 deed, the rights and interests of the public, affect and 
 modify all rules of construction.
 
 145 
 
 The Michigan street railway laws are to be strictly con- 
 strued as far as they confer power either on the street 
 railway corporations organized under them, or on the 
 local authorities of cities, villages and townships. 
 
 These municipalities are authorized to consent to the 
 exercise on the streets designated of the franchises of the 
 company to which a grant is made, and to agree with the 
 company on the rates of fare and other terms and condi- 
 tions. They are not authorized to do more, and any at- 
 tempt on their part to exercise a general legislative au- 
 thority in the premises would be without authority and 
 illegal. That was the vital p^int in the case of Detroit 
 vs. Detroit Citizens' Street Railway Co., 184 U. 8. 368, 
 in which the city undertook to reduce the agreed rates 
 of fare by passing an ordinance under alleged legislative 
 power to do so. 
 
 The expiration of an agreement fixing the rates of fare, 
 does not increase or add to the legislative power of the 
 municipality. It still has power to enter into an agree- 
 ment with the street railway company; it has that power 
 and no more or greater authority. 
 
 The laws of the state are not changed or enlarged by the 
 expiration of any such agreement; they remain as they 
 were. The tracks and poles and wires of the street rail- 
 way company being in place in the streets, it is the plain 
 duty of the company to continue the service, and a cor- 
 responding duty rests on the local authorties, to permit 
 the service to continue, as they have no authority to do 
 anything else; and are powerless except to negotiate and 
 enter into a new agreement. 
 
 The argument that this would be giving the street rail- 
 way company too much power, as by refusing to make a 
 new agreement, it would practically be in possession of a 
 perpetual franchise, is fallacious. The company would be
 
 146 
 
 bound to observe its common law obligation to charge 
 reasonable fares only, and whether a given rate of fare is 
 reasonable or not is a judicial question, easily litigated 
 and adjudicated, without the possibility of any injustice 
 or wrong, except so far as the learned judges are human 
 beings, and possessed of human weaknesses. As the con- 
 stitution of Massachusetts expresses it, "It is the right 
 of every citizen to be tried by judges as free, impartial 
 and independent as the lot of humanity will admit." 
 
 When a municipality refuses, or for any reason is un- 
 able to make a contract with a street railway company 
 which is mutually satisfactory, and assumes to dictate 
 terms and decide the controversy itself, it is in the posi- 
 tion of a judge who decides his own case, and is not wil- 
 ling to have it adjudicated by an independent, disinter- 
 ested and impartial tribunal. 
 
 In Kennedy vs. Gies, 25 Mich. 83, the Supreme Court 
 of Michigan r had occasion to construe the provision of 
 the state constitution of 1850 that "The board of super- 
 visors or in the county of Wayne, the board of county 
 auditors shall have the exclusive power to prescribe and 
 fix the compensation for all services rendered for and to 
 adjust all claims against their respective counties, and 
 the sum so fixed or defined, shall be subject to no ap- 
 peal." 
 
 The question presented was whether the board of 
 county auditors of Wayne County had a right to fix the 
 amount of their own compensation. The opinion of the 
 court was delivered by Judge Christiancy, w T ho was dis- 
 tinguished for the clearness of his arguments and the 
 force of his logic. 
 
 He said : 
 
 "As the services of the county auditors are 'services 
 performed for the county/ it is insisted that the power
 
 147 
 
 of the auditors to fix the compensation for their own ser- 
 vices is necessarily included under this provision. And 
 if constitutions and statutes were always to be con- 
 strued like mathematical axioms, this reasoning would 
 be very conclusive, since the whole must include all its 
 parts; and 'all services rendered for the county,' would 
 necessarily include the services of the auditors, so far, 
 at least, as they were performed exclusively for the 
 county. But in legal reasoning, and in the construction 
 of constitutions and statutes, we are often compelled to 
 content ourselves with conclusions somewhat less certain 
 than those involved in mathematical axioms; because 
 neither conventions nor legislatures always use language 
 with mathematical accuracy, and neither the human 
 mind nor human affairs, will always submit to merely 
 mathematical rule. For various reasons, and upon var- 
 ious grounds, exceptions or qualifications are sometimes 
 implied, though not expressed. An act or constitution 
 which should give to justices of the peace, or to a certain 
 court, the right to try all cases involving certain amounts, 
 or of a certain character, would give neither the justice 
 nor the judge the right to try his own cause, or give final 
 judgment in his own favor, though the case in every other 
 respect should fall within the class he was expressly 
 authorized to try. An exception of such cases would 
 be implied; and the exception would be just as valid and 
 just as readily recognized by all courts as if it had been 
 expressed. I do not mean to say that the like exception 
 in the present case, if any can be implied, is as clear 
 as in the instance supposed. I use the illustration now 
 only to show that the mathematical argument is by no 
 means necessarily conclusive. This provision, whatever 
 may be the proper inference from it, does not expressly 
 declare that the board shall have the right to fix their 
 own compensation, or allow their own claims, as has
 
 148 
 
 generally, if not always, been done in the few innstances 
 of minor importance, in which it has been the real in- 
 tention of legislative bodies to grant such a power; it 
 does not expressly refer to the subject of their compen- 
 sation, or their claims, and it is entirely legitimate to 
 inquire whether there is not something in the nature 
 of the provision itself, considered in connection with 
 the legislative and judicial history of the state, and the 
 action of the convention which framed it, which may 
 furnish a satisfactory inference that such an exception 
 was intended, and should therefore be implied in refer- 
 ence to the services and claims which this board of audi- 
 tors were empowered to fix and prescribe, and the claims 
 they were authorized to adjust, as would be implied in 
 case of power given to judicial officers, in the instance 
 already mentioned. 
 
 "As to the nature of the provision itself, if it is to be 
 construed, as claimed by the relator, to give the board 
 the power, exclusive of that of the legislature, to fix the 
 amounts to be allowed to all officers, for services to be 
 performed for the county, their own included, and to 
 preclude the legislature from prescribing the fees or 
 salary to be paid, and to determine, without control from 
 the legislature or the courts, all claims of every nature 
 for which the county is liable, including claims in their 
 own favor; then, it gives to the board both a legislative 
 and a judiciaj power, absolute, and unlimited, upon all 
 questions of this kind; legislative, in prescribing in ad- 
 vance the rule and rate of compensation, and judicial, in 
 determining, without appeal or review, the just and rea- 
 sonable compensation for any service for the county, 
 though performed by themselves, for which they have 
 not, in their legislative capacity, already prescribed a 
 definite compensation; and such would seem to be the
 
 149 
 
 nature of the allowance of the claim of fifty dollars to 
 the relator in the present case. 
 
 "Now, the maxim, that no man shall be judge in his 
 own cause, is one so deeply rooted in the minds of the 
 American people, and, up to the time the constitution 
 was adopted, so uniformly applied to this and the like 
 boards, that to give them this power of final adjudication 
 upon their own claims and of fixing the amount of their 
 own compensation without appeal or review, the language 
 should be so clear as to admit of no other reasonable 
 construction." 
 
 Judge Campbell said: 
 
 "In regard to the power of the county auditors over 
 claims generally, I think the language of the constitu- 
 tion is so much broader than that of any previous statute 
 as to give them legislative, as well as quasi judicial, 
 authority, to the exclusion of any other interference. 
 
 "But I agree that, in regard to their own claims, there 
 is such an incongruity in their acting on both sides, and 
 representing adverse interests, that there should be an 
 exclusion of the power asserted, unless clearly given be- 
 yond mistake. They are not a general legislative body, 
 but officers acting only within a limited sphere, and the 
 general common-law disabilities of such officers, which 
 would exist if this provision were statutory, should ap- 
 ply as well to constitutions as to statutes, so long as they 
 are within the same equity. I agree, therefore, in the 
 result arrived at by my brethren." 
 
 As the street railway act of 1867 does not contain a 
 single word or clause expressly authorizing the local 
 authorities to put a time limit on their consent, and the 
 act itself treats the consent as separate and distinct from 
 the terms and conditions and the rates of fare, no vio-
 
 150 
 
 lence is done to the act by construing the consent as 
 perpetual, and the terms and conditions and rates of 
 fare, as subject to time limitations. 
 
 Sec. 14 of the act reads : 
 
 "After any city, village or township shall have con- 
 sented, as in this act provided, to the construction and 
 maintenance of any street railways therein, or granted 
 any rights and privileges to any such company, and such 
 consent and grant have been accepted by the company, 
 such township, city or village shall not revoke such con- 
 sent, nor deprive the company of the rights and privileges 
 so conferred." 
 
 It is one thing to put a time limit on the terms and 
 conditons and the rates of fare, and quite another thing 
 to put a time limit on the consent. 
 
 Power to place a time limit on the one may be fairly 
 implied, but the implication should not be carried so far 
 as to authorize a time limit on the other. The consent 
 is so connected with, and has such a relation to, the fran- 
 chise to maintain and operate as to preclude any time 
 limitation thereon. 
 
 The street railway act of 1867 expressly authorizes 
 the formation of corporations "for the purpose of con- 
 structing, owning, maintaining or using any street rail- 
 way in any city, village or township in this state." 
 
 The state grants the franchise of corporate existence 
 and the franchise to construct, maintain and operate 
 street railways. The terms and conditions and the rates 
 of fare, and the designation of the streets on which the 
 franchise to construct, maintain and operate is to be 
 exercised, are left to be fixed by agreement with the
 
 151 
 
 local authorities. The lapse of such an agreement, can 
 have no effect on the franchise granted by the state. 
 
 A similar grant was made by special act by the Wis- 
 consin legislature, to the Milwaukee Gas Light Company. 
 To fix the terms and conditions reference was made to a 
 contract between the city of Milwaukee and John Lock- 
 wood, which contract was for the term of fifteen years; 
 but the Supreme Court of Wisconsin held, that the fran- 
 chises granted by the state did not expire with the fifteen 
 years. (State vs. Milwaukee Gas Light Co., 29 Wis. 
 454.) 
 
 A Detroit street grant to a gas company provided, 
 that "if it shall at any time enter into a combination 
 with any gas-light company concerning rates to be 
 charged for gas, either to the city or private consumers, 
 then the consent given by this ordinance shall cease and 
 this ordinance shall become null and void." 
 
 Marston, C. J., held that an agreement between two 
 companies dividing the city between them, was a combin- 
 ation concerning prices; but he then said: 
 
 "It does not, however, follow that the city can have 
 the relief prayed for in this case. The violation of such 
 an agreement would not be a forfeiture of the consent 
 given by the city, nor of the property of the corporation 
 acquired thereunder. This would be a measure of dam- 
 ages for the violation of an agreement recognized neither 
 in courts of law nor of chancery." 
 
 Cooley, Graves and Campbell concurred in result, but 
 did not agree with what the chief justice said about the 
 division of territory between the two companies being 
 in effect a combination as to prices.
 
 152 
 
 There is nothing to indicate that if they had agreed 
 with the chief justice about the division of territory, they 
 would have disagreed with him in what he said in the 
 above quotation. 
 
 In effect the court held that the clause in the ordin- 
 ance granting the consent of the city, providing that a 
 combination concerning prices should work a termination 
 of the consent, was void. (Detroit vs. Mutual Gas Light 
 Co., 43 Mich. 594.) 
 
 The court had previously held, that the local consent 
 was not a franchise, but a mere contract or license, and 
 therefore quo warranto would not lie to determine 
 whether it had terminated. (Maybury vs. Mutual Gas 
 Light Co., 38 Mich. 154.) 
 
 The designation of the streets is a part of the consent, 
 and the streets having been once designated and occupied, 
 there is no occasion for another designation, and no occa- 
 sion for a renewal of the consent. The power of the 
 local authorities as to these has been exhausted, and the 
 only power that remains to them, at the expiration of 
 any term agreed upon, is to come to another agreement 
 with the street railway company, its successors or as- 
 signs. 
 
 At the inception of a street railway the local authori- 
 ties have an undoubted power to withhold their consent 
 entirely, and to impose any terms and conditions and 
 rates of fare they see fit; their power is absolute; but 
 the street railway company is under no obligation to ac- 
 cept the grant. Both of the parties occupy a position 
 of independence. 
 
 At the expiration of a grant for a limited period, the 
 situation has changed. The street railway company has 
 its property in place in the streets and is serving the
 
 153 
 
 public to the extent of its capacity. To remove from tho 
 streets is to reduce the value of the physical property 
 enormously, and to deprive the company of its business. 
 This is not a position of independence, if the company is 
 obliged to accept the terms and conditions and rates of 
 fare demanded by the local authorities, or get out of the 
 streets. The one course, may be quite as destructive as 
 the other. 
 
 Ought it not to be the law, that the local authorities 
 can only demand reasonable terms and conditions and 
 rates of fare, and that the street railway company can 
 not insist upon any thing more? 
 
 Who is to decide this question of reasonableness? Most 
 assuredly neither of the parties in interest! Who then? 
 Where is the disinterested and impartial tribunal, with 
 a competency of jurisdiction, to decide such a question 
 and such a case? 
 
 It is a case where the state ought to intervene. 
 
 The state has intervened! 
 
 (1) The state has accepted and adopted the common 
 law as its general body of 
 
 (2) The state has enacted statutes prescribing and 
 fixing the rights, duties and powers of both municipal 
 and street railway corporations, which laws, if rightly 
 construed, relegate the question of reasonableness to the 
 judicial department of the government. 
 
 (3) The state has established an elaborate system of 
 courts, of legal and equitable jurisdictions, with no 
 limitation except that the courts are only to exercise 
 their jurisdiction in actual legal or equitable controver- 
 sies duly brought before them by the parties in interest.
 
 154 
 
 (4) The state has created an executive board, known 
 as the Michigan Railroad Commission, clothed with the 
 authority to decide in the first instance, whether the rates 
 of fare and freight charged by common carriers are rea- 
 sonable or not, and to fix such rates as are reasonable ; 
 and it has provided that any party feeling aggrieved by any 
 decision and order of the commission, may have the same 
 reviewed by the circuit court in chancery, with the right 
 of appeal to the supreme court of the state as in other 
 cases. 
 
 Thus it appears that the state itself has vested the ul- 
 timate power to decide the question of reasonableness in 
 its own judiciary. 
 
 And the one grand object and purpose of the state is 
 to compel persons and corporations, both public and 
 private, who seek a redress of grievances, to submit them- 
 selves to the arbitrators and judges established and 
 maintained by the state, and not in any wise whatsoever 
 to take the law into their own hands and to redress or 
 avenge their own wrongs. Such was the constant prac- 
 tice in barbarous times and is still the practice in bar- 
 barous nations. 
 
 A well ordered judicial system is the highest evidence 
 of civilization. 
 
 The people of Michigan are not barbarians.
 
 155 
 
 IX. 
 
 The rule that public grants are to be construed 
 strictly, in favor of the grantor and against the 
 grantee, furnishes abundant proof that the Detroit 
 United Railawy has a right to continue to occupy 
 the streets and to serve the public beyond the period 
 of thirty years. 
 
 In this connection it must be remembered that there 
 are three parties to the contract: (1) the state as repre- 
 sentative of the general public (2) the street railway 
 company, and (3) the municipality; and that the in- 
 terests and rights of all three must be considered. 
 
 Under all the more authoritative decisions, the rule 
 of strict construction has no other foundation than the 
 protection of the public interests. The rule recognizes 
 an inherent weakness, a want of contractual ability, in 
 all public bodies and functionaries, and the courts, with- 
 in the limits of the judicial power, assume to act as the 
 guardians of the public interests, and conservators of 
 the public rights. 
 
 And for that very reason when the public interests re- 
 quire it, the rule of strict construction is rejected and a 
 more liberal construction is adopted. 
 
 United States vs. Denver & Rio Grande Railway Co., 
 150 U. 8. 1, involved the construction of the act of con- 
 gress of 1875, granting rights of way through the public 
 lands to railroad companies, "with the right to take from 
 the public lands adjacent to the line of said road, ma- 
 terial, earth, stone, and timber necessary for the con- 
 struction of said railroad."
 
 15G 
 
 If the act was given a narrow construction, the timber 
 taken from lands adjacent to the line could only be used 
 for construction at or near the place from which it was 
 taken, but if given a liberal construction the timber could 
 be taken and used at remote places on the line of the 
 railroad. 
 
 The court in an opinion by Justice Jackson, said: 
 
 "It is undoubtedly, as urged by the plaintiffs in error, 
 the well settled rule of this court that public grants are 
 construed strictly against the grantees, but they are 
 not to be so construed as to defeat the intent of the 
 legislature, or to withhold what was given either ex- 
 pressly or by necessary or fair implication." 
 
 After quoting from the opinion of the court by Jus- 
 tice Field in Winona & St. Peter Railroad vs. Barney, 
 113 U. 8. 618, 625, the opinion continues: 
 
 "When an act, operating as a general law, and mani- 
 festing clearly the intention of congress to secure public 
 advantages, or to subserve the public interests and wel- 
 fare by means of benefits more or less valuable, offers to 
 individuals or to corporations as an inducement to un- 
 dertake and accomplish great and expensive enterprises 
 or works of a quasi public character in or through an 
 immense and undeveloped public domain, such legislation 
 stands' upon a somewhat different footing from merely a 
 private grant, and should receive at the hands of the 
 court a more liberal construction in favor of the purposes 
 for which it was enacted. (Bradley vs. New York & New 
 Haven Railroad, 21 Connecticut, 294; Pierce on Rail- 
 roads, 491.) 
 
 "This is the rule, we think, properly applicable to the 
 construction of the act of 1875, rather than the more 
 strict rule of construction adopted in the case of purely 
 private grants; and in view of this character of the act,
 
 157 
 
 we are of opinion that the benefits intended for the con- 
 struction of the railroad in permiting the use of timber 
 or other material, should be extended to and include the 
 structures mentioned in the act as a part of such rail- 
 road." 
 
 If a local grant is to be strictly construed, it must be 
 done in subordination to the grants of power by the legis- 
 lature to municipalities and street railway companies, 
 which are also to be strictly construed. It would be a 
 plain contradiction to strictly construe a grant by a 
 municipality, and to give a liberal construction to a 
 grant of power to it, where both relate to the same sub- 
 ject matter. 
 
 In making a street grant the local authorities reserve 
 all power and rights not granted expressly or by necessary 
 or fair implication; but that does not enlarge their own 
 power as that is also subject to the rule that the legisla- 
 ture reserves all power not granted expressly or by neces- 
 sary or fair implication. This amounts to a reservation 
 of power by the municipality coupled with a reservation 
 of power by the state. 
 
 The power reserved is somewhere; it has an abiding 
 place. The municipality only reserves (on a strict con- 
 struction), so much of the power conferred on it by the 
 state as the municipality does not grant, and the state 
 reserves so much of its power, as is not granted to the 
 municipality. 
 
 The state is the source, the fountain head, of all the 
 power possessed by either a municipality or a street rail- 
 way company, and the public objects sought to be accom- 
 plished by the state, have, therefore, a controlling in- 
 fluence. 
 
 The state expressly grants to each street railway com- 
 pany, the right to exist as a corporation, and the right to 
 maintain and operate the street railwavs constructed bv 
 *
 
 158 
 
 it, and to charge tolls or fares for their use by the public. 
 These two franchises are separate entities, as the right to 
 operate a railroad passes to the purchaser of the physical 
 property constituting the railroad, but the franchise of 
 corporate existence does not pass. (Memphis R. Co. vs. 
 Commissioners, 112 U. S. 609; New Orleans, etc. R. Co. 
 vs. Delamore, 114 U. 8. 501.) 
 
 The constitutions of New York of 1874 and 1894 con- 
 tain this provision: 
 
 "But no law shall authorize the construction or opera- 
 tion of a street railroad except upon the condition that 
 the consent of the owners of one-half in value of the 
 property bounded on, and the consent also of the local 
 authorities having the control of that portion of the street 
 or highways upon which it is proposed to construct or 
 operate such railroad be first obtained, or in case the con- 
 sent of such property owners cannot be obtained, the 
 appellate division of the Supreme Court, in the depart- 
 ment in which it is proposed to be constructed, may, upon 
 application appoint three commissioners who shall deter- 
 mine, after a hearing of all parties interested whether 
 such railroad ought to be constructed or operated, and 
 their determination, confirmed by the court-, may be taken 
 in lieu of the consent of the property owners." 
 
 Another provision provides that all general laws and 
 special acts for the creation of Corporations, may be al- 
 tered from time to time or repealed. 
 
 In 1884 the New York legislature passed a general 
 law for the incorporation of surface' street railway cor- 
 porations. The act did not limit the duration of such 
 corporations, but they were required to state in their ar- 
 ticles of association the period of time for which they 
 were organized. The provisions relative to the local con-
 
 159 
 
 sent were in accord with the constitutional provision 
 above quoted. 
 
 The Broadway Surface Railroad Company was organ- 
 ized under that act. Its articles of incorporation fixed 
 the duration of the company at one thousand years. Not 
 being able to obtain the consent of the majority in value 
 of the owners of the property bounded on the street, the 
 company obtained the appointment of commissioners who 
 reported in favor of the construction of the railroad, and 
 their report was approved by the appellate division of the 
 Supreme Court. 
 
 The company also obtained the consent of the local 
 authorities of the City of New York. This was done by a 
 system of wholesale bribery, but the resolution of the 
 common council was never attacked on the ground that 
 it was obtained by fraud. 
 
 The legislature of the state took other means to undo 
 the work of Jacob Sharp and his associates in crime. 
 
 The legislature at its 1886 session first passed an act 
 providing that the local consent for the use of the streets 
 by street railway companies should be sold at public auc- 
 tion to the bidder who would give the largest percentage 
 of its gross receipts derived from the operation of its 
 railway, which should not, in cities of 250,000 population, 
 be less than three per cent for the first five years, and five 
 per cent thereafter. The legislature expressly reserved 
 the right to regulate and reduce the rate of fare. (Laws 
 of 1886, Chap. 65, p. 81.) 
 
 The legislature then passed an act annulling and re- 
 pealing the charter of the Broadway Surface Railroad 
 Company. (Id. Chap. 268, p. 443.) 
 
 It followed this with an act that when a surface street 
 railroad company shall have been dissolved or annulled 
 or its charter repealed, the consent of the local aut.hori-
 
 160 
 
 ties, the consent of the property owners, and the order of 
 the general term confirming the report of any commis- 
 sioner, shall not be in any way impaired, revoked, termin- 
 ated or otherwise affected, but the same shall be sold at 
 public auction by the municipal authorities in the same 
 manner as provided by the previous act. (Id. Chap. 271, 
 p. 445.) 
 
 A little later an act was passed to provide for the wind- 
 ing up of corporations which have been annulled and dis- 
 solved by legislative enactment, and authorizing the at- 
 torney general of the state to bring suit for that purpose. 
 The receiver authorized to be appointed was given au- 
 thority to pass on all claims, his report thereon to be con- 
 firmed by the court. (Id. Chap. 310, p. 492.) 
 
 All this legislation was passed upon by the New York 
 Court of Appeals, in People vs. O'Brien, 111 N. Y. 1. 
 
 It was held that the repealing act was valid; that 
 although the Broadway Surface Railroad Company was 
 created for a limited period, it could acquire title in fee 
 to property necessary for its use; that the grant in this 
 case, not being limited by its terms was in perpetuity; 
 that the tracks of a railroad company and the franchise 
 of maintaining and operating its road are inseparable; 
 and that the acts of the legislature, Chap. 271 and Chap. 
 310, were unconstitutional and void. 
 
 The case did not present the question, whether the fran- 
 chise to maintain and operate the railroad, would termin- 
 ate at the expiration of a limited period, if the local con- 
 sent had been made with such a limitation. The case is, 
 therefore, without authority on that question. 
 
 I cite the case as an authority where it was held that 
 the franchise to maintain and operate is connected with 
 the physical property, and is not lost by the dissolution 
 of the company, resulting from a legislative repeal of its 
 charter.
 
 161 
 
 X. 
 
 Recent street railway history in Ohio shows the 
 necessity of avoiding similar conditions in Michigan. 
 
 In the VII subdivision of this brief the decision of the 
 Supreme Court of the United States in Cleveland Electric 
 Ry. Co. vs. Cleveland, 204 U. 8. 117, is considered and the 
 opinion expressed that the street railway company, when 
 it removed its tracks, poles and wires from Garden street, 
 was guilty of a great strategical blunder. 
 
 The Garden street line had been in operation for thirty- 
 seven years. It was originally built under an ordinance 
 adopted January 14, 1868, which limited the duration of 
 the grant to twenty years; but by an ordinance adopted 
 March 22, 1880, the grant was extended for twenty-five 
 years from that date, and hence expired March 22, 1905. 
 
 Large residence and business districts tributary to 
 Garden street had been built up in reliance on the street 
 railway, and the company in abandoning the street, vio- 
 lated its duty and obligations to the public, without any 
 advantage to itself. The ties, rails, poles and wires re- 
 jnoved from the street had only a second hand value, less 
 the cost of removal. The original cost of placing them in 
 the street was wholly lost. While in the street, and in 
 actual use, the tracks and overhead works, were worth as 
 much as it would cost to replace them, less the depreci- 
 ation due to their age and the extent to which they were 
 worn. In any condemnation proceedings, or other adjust- 
 ment the city or the rival street railway company would 
 have been required to pay a just compensation for the 
 property as it was, and not as junk.
 
 162 
 
 The actual loss sustained by the Cleveland Electric in 
 removing its railway from the street must have been very 
 large, conservatively estimated at $250,000, and it lost 
 possession of the street. 
 
 About 4% miles of double track, which had been rebuilt 
 with concrete foundations three or four years before, were 
 taken up. The rails and ties were removed, and the 
 mutilated street was repaved and put in good condition. 
 The service was stopped on the 23rd day of April, 1907, 
 and the work of digging up the tracks, and removing the 
 poles and wire was commenced on April 29, 1907. The 
 work of removal and repaving was completed in thirty 
 days. 
 
 A controversy arose over the making of a new grant, 
 but eventually a rival company, known as the Neutral 
 Street Railway Company, obtained such a grant and re- 
 built the road. Use was made of the concrete foundations 
 and paving material left in the street, and the actual cost 
 of rebuilding was about $200,000. 
 
 But the greatest loss was sustained by the public. Street 
 railway service on the line was not resumed until June 8, 
 1908. A population that had had a street railway service 
 for thirty-seven years was deprived of it for over thirteen 
 months. 
 
 The Garden street tracks connected with those on Pros : 
 pect street at or in the vicinity of Ninth street, and they 
 ran out on Garden street, now Central avenue, to Eighty - 
 Third street. A branch line started at Fifty-fifth street, 
 and ran out Quincy street to the Woodhills road, which 
 is the next street beyond One Hundred and Fifth street. 
 
 The nearest street car line on the north was the Cedar 
 avenue line, and the nearest line on the south was the 
 Scovill street and Woodland avenue line. Between these 
 two lines on the north and south was located a dense pop-
 
 163 
 
 ulation which was served by the Garden street line and its 
 Quincy street branch. This part of Cleveland is not oc- 
 cupied by the wealthy,' but by a plain and common people, 
 much more in need of adequate street railway service. 
 They were put to great inconvenience and much actual 
 loss, especially in the depreciation of the rental and sale- 
 able value of property. 
 
 It would be difficult to estimate in dollars and cents the 
 total actual loss these people sustained, but it was very 
 large, and the whole proceeding can only be character- 
 ized as an outrage, chargeable to the Cleveland Electric 
 Railway Company and the corporation known as the City 
 of Cleveland. 
 
 Here we have a specimen of the results of the landlord 
 and tenant theory of street grants to public utility cor- 
 porations. 
 
 The constitution and laws of Ohio are supposed to 
 sanction and require just such a wanton destruction of 
 property, and public inconvenience and injury, whenever 
 a public utility corporation and the municipality in which 
 it is located, are not able to agree on terms for a renewal 
 grant. 
 
 I do not believe the laws of Ohio, rightly construed, re- 
 quire any such unwise and impolitic interpretation, but 
 the decisions of the courts in that state seem to support 
 that view. 
 
 Rev. Stat. of Ohio of 1880, contain the following sec- 
 tions: 
 
 Sec. 2501. No corporation, individual, or individuals 
 shall perform any work in the construction of a street 
 railroad until application for leave is made to the council, 
 in writing, and council, by ordinance, shall have granted 
 permission, and prescribed the terms and conditions upon, 
 and the manner in which the road shall be constructed ;i
 
 164 
 
 operated, and the streets and alleys which shall be used 
 and occupied therefor, and cities of the first and second 
 grades of the first class may renew any such grant at its 
 expiration upon such conditions as may be considered 
 conducive to the public interests. 
 
 Sec. 2502. No ordinance for such purpose shall be 
 passed until public notice of the application therefor has 
 been given by the clerk of the corporation, in one or more 
 of the daily papers, if there be such, and if not, then in 
 one or more of the weekly papers published in the cor- 
 poration for the period of three successive weeks, and no 
 such grant shall be made except to the corporation, in- 
 dividual, or individuals that will agree to carry passen- 
 gers upon such proposed railroad at the lowest rates of 
 fare, and shall have previously obtained the written con- 
 sent of a majority of the property holders on the line of 
 the proposed street railroad, represented by the feet front 
 of lots abutting on the street along which such road is 
 proposed to be constructed; provided that no grant, nor 
 renewal of any grant for the construction or operation of 
 any street railroad shall be valid for a greater period than 
 twenty-five years from the date of such grant or renewal ; 
 and after such grant or renewal of a grant is made, 
 whether by special or general ordinance, the municipal 
 corporation shall not, during the term of such grant or 
 renewal, release the grantee from any obligation or lia- 
 bility imposed by the terms of such grant or renewal -of a 
 grant. 
 
 The above sections without any change material to this 
 discussion are still in force. (1 Bates Anno. Ohio Stat., 
 6th Ed., Sees. 1536-184, 1536-185.) 
 
 These statutory provisions absolutely prohibit local 
 street grants for more than twenty-five years, but it was
 
 165 
 
 not the intention of the Ohio legislature that street rail- 
 ways built under such grants should be ripped up and 
 destroyed at the end of the term agreed upon, for ample 
 provision is made for renewals without a reletting to the 
 corporation or person who will on advertised proposals, 
 bid the lowest rates of fare. Municipalities are author- 
 ized to "renew any such grant at its expiration upon such 
 conditions as may be considered conducive to the public 
 interests." 
 
 These words recognize the public rights as paramount; 
 they do not authorize "conditions," antagonistic to the 
 public interests; nor were they intended to confer any ab- 
 solute power to destroy a valuable property devoted to 
 the public use, by a capricious refusal to grant a renewal. 
 
 The courts have no power to compel renewals or to fix 
 their terms and conditions, but they have control of the 
 remedies, which a municipality must resort to in order to 
 dispossess the company in possession. The only remedy 
 open to a municipality would be a bill of complaint in a 
 court having the powers of a court of equity, praying for 
 an injunction to enjoin the company from continuing the 
 operation of the street railway, but no court would grant 
 such an injunction, if it would result in great public in- 
 convenience and injury, and the attitude of the municipal 
 authorities was capricious and wanton. 
 
 Such an injunction was granted by the Superior Court 
 of Cincinnati, in the case of City of Cincinnati vs. Cincin- 
 nati Inclined Plane Ry. Go., 30 Ohio Wkly. Law Bui., 321 ; 
 but on the suggestion of the corporation counsel the issu- 
 ing of the writ was deferred for six months to enable the 
 company to apply to the city authorities for a new grant. 
 The case was appealed to the Supreme Court of Ohio, 
 where October 23, 1894, the judgment below was affirmed 
 for the reasons stated in the opinion of the court below.
 
 166 
 
 52 Ohio St. 609. The opinion of the superior court is not 
 in the state report, but will he found in the report of the 
 case, 44 N. E. 327. 
 
 The Louisville Trust Company held a, mortgage on the 
 property of the Cincinnati Inclined Plane Ry. 'Co., and as 
 it was not a party to the suit in the state courts, it was 
 not bound by the judgment therein. 
 
 The Louisville Trust Company filed a bill in the United 
 States Circuit Court under which the case decided by the 
 state courts was re-litigated. District Judge Sage held 
 that the decision of the state Supreme Court was con- 
 clusive, and binding on the federal courts, and dismissed 
 the bill, 73 Fed. 716. The Louisville Trust Company ap- 
 pealed to the United States Circuit Court of Appeals for 
 the sixth circuit, where the case was heard by Lurton and 
 Taft, Circuit Judges, and Hammond, District Judge. 76 
 Fed. 296. 
 
 In the meantime the Louisville Trust Company filed a 
 bill in the United States Circuit Court to foreclose its 
 mortgage on the property of the Cincinnati Inclined 
 Plane Railway Company and obtained the appointment of 
 a receiver, who was in possession of the property, and 
 operating the street railways when the case was heard in 
 the Court of Appeals. That court in an opinion by Judge 
 Lurton disagreed with the state courts and with Judge 
 Sage in some particulars, and agreed with them in others ; 
 that is, in effect it modified the decree of the state courts. 
 The decree of Judge Sage was reversed and the case re- 
 manded for such further orders and decrees not inconsist- 
 ent with the views expressed in the opinion of the Court 
 of Appeals. The city of Cincinnati then filed an inter- 
 vening petition in the foreclosure suit pending in the 
 United States Circuit Court, and in which petition it 
 prayed that an order be made directing the receiver to
 
 167 . 
 
 cease from holding possession of the streets in question, 
 and from using said streets, and from maintaining and 
 operating the street railway thereon, and directing the 
 receiver to surrender full possession of the streets to the 
 city of Cincinnati. 
 
 The Louisville Trust Company filed an answer to the 
 intervening petition and showed, among other things, that 
 on December 14, 1896, it applied in good faith to the leg- 
 islative body of the city, for renewal grants, and that on 
 the 19th day of December, 1896, it obtained an order of 
 the Superior Court, suspending the writ of injunction 
 granted by that court for six months, with leave to fur- 
 ther apply, and a copy of the order of the court and of 
 the opinion of Judge Smith, granting the same, was made 
 a part of the answer. 
 
 The hearing on the intervening petition and the answer 
 thereto was heard in the Circuit Court, before Taft, Cir- 
 cuit Judge, who was one of the judges who had heard and 
 decided the other case in the Court of Appeals. Judge 
 Taft's decision on the intervening petition is reported in 
 78 Fed. 307. It was rendered January 4, 1907, before 
 the six month' suspension of the writ of injunction en- 
 joining the company from operating on the streets in 
 question, had expired. 
 
 Judge Taft, now president of the United States, and 
 equally distinguished as a jurist and a diplomatist, in dis- 
 posing of the case, was confronted with the fact that all 
 of the courts had agreed that some of the grants under 
 which the street railway company occupied streets or 
 parts of streets had expired and the city was entitled to 
 dispossess the company. 
 
 In view of the fact that the Superior Court had sus- 
 pended the issuing of its injunction, to enable the street
 
 168 
 
 railway company to negotiate renewal grants, and such 
 negotiations were then being conducted, Judge Taft de- 
 clined to grant the intervening petition of the city. He 
 said: 
 
 "Negotiations have been opened by the inclined plane 
 company with the board of legislation of the city, looking 
 to the renewal of former grants. The Superior Court, 
 which in 1893 granted a perpetual injunction against the 
 use by the inclined plane company of the invalid part of 
 its line as a street railway, has -suspended the operation 
 of its injunction for six months from December 11, 1896, 
 to permit such a negotiation. 
 
 "The vigor of Judge Smith's language in granting the 
 suspension leaves no room to doubt that in his judgment 
 the situation of the parties justifies him in withholding 
 his hand, as chancellor, in the enforcement of the decree, 
 until a full opportunity is given to the inclined plane 
 company to obtain, if possible, new concessions from the 
 city. I concur with Jndge Smith in this view, and do not 
 think that the time allowed is unreasonable, when one 
 
 considers the somewhat slow movements of a municipal 
 legislature. It is urged upon the court that such an af- 
 firmative order of the kind here prayed for was made 
 upon a receiver in the case of Felton vs. Ackermom, 22 
 U. 8. App. 154, 9 O. C. A. 457, (md 61 Fed. 225. The 
 circumstances of that case were very different. There the 
 receiver, while operating a railroad, erected a fence across 
 a public highway, under a void order of a road commis- 
 sioner. He was required by the court to undo the wrong 
 he had unwittingly done. It was no sacrifice of the prop- 
 erty in his charge. The fence reduced the number of rail- 
 way crossings by one, and to that extent lessened the dan- 
 ger of crossing accidents, but its removal caused but a 
 slight change in the receiver's situation, or that of the 
 railway company's line which he was operating. So far
 
 169 
 
 as the petition of the city asks for affirmative relief against 
 the inclined plane company and the trust company in the 
 form of an 'order for the removal of tracks, poles, wires, 
 bridges and buildings, it is denied." 
 
 The denial of the city's petition did not, in Judge Taft's 
 judgment dispose of the whole case made by that petition. 
 The court was in possession of the whole line of railway, 
 valid and invalid, and the city could pursue no remedy 
 for the enforcement of its rights except by leave' of the 
 court ; and Judge Taft thought that barrier ought in some 
 way to be removed. Counsel for the street railway com- 
 pany had urged four different reasons to the contrary, all 
 of which were taken into consideration. His comments 
 on the second reason advanced by counsel, were as fol- 
 lows : 
 
 "2. Nor do I think that the other proposition that the 
 city may not oust the inclined plane railway from the 
 enjoyment of its admittedly illegal occupation of the 
 streets, by using only so much force as is necessary, has 
 been so clearly established as to admit of no doubt. The 
 cases cited by the counsel for the trust company and the 
 inclined plane company are Easton 8. E. & W. E. P. Ry- 
 Co. vs. City of Easton, 133 Pa. St. 505, 19 Atl. 486, and 
 Asheville St. Ry. Co. vs. City of Asheville, 109 N. C. 688, 
 14 8. E. 316. In the first of these cases a street railway 
 company had an admitted right to ocupy a street with its 
 tracks. In a change of grade made by the city, the com- 
 pany had to take up and relay its tracks for a short dis- 
 tance. The city claimed the right to require it to lay a 
 particular kind of rail. The company laid another. The 
 city tore it up, and stopped the operation of the road. 
 The company relaid it, and then procured an injunction 
 against the city's further interference. The Supreme 
 Court of Pennsylvania held that an injunction would
 
 170 
 
 properly issue against the city, whatever the merits of 
 the controversy over the different kinds of rail, "because 
 the city could not, before submitting the question to the 
 courts, take the law into its own hands, decide a doubtful 
 question of law, and upon the assumption that its de- 
 cision was right, inflict great loss upon the railway com- 
 pany's business, especially when the convenience of the 
 public might be seriously affected thereby. The North 
 Carolina case was similar in principle. In both cases the 
 companies were rightfully in the streets, in neither case 
 had the rights of the parties been adjudicated at all in a 
 court, and in each the contention of the city authorities, 
 out of which the action grew, was combated by the rail- 
 way company. In the case at bar it has been decided 
 finally, and it is not now denied by either the trust com- 
 pany or the inclined plane company, that the grants to 
 the latter to occupy the streets in question have all ex- 
 pired. This would seem to make a broad distinction be- 
 tween the case at bar and those cited. By the common 
 law, a tenant at will, who is notified by the landlord to 
 leave the premises, may be forcibly ejected, without giving 
 the tenant any cause of action, if no more force than is 
 necessary to remove the tenant and his goods is used. 
 Low vs. Elwell, 121 Mass. 309. If a man build his house 
 upon a common, a commoner may, after notice tear down 
 the house, though the man be in it, and this without in- 
 curring liability to the ejected person. Davies vs. Wil- 
 liams,, 16 Q. B. 546. More than this, it has been generally 
 held that an injunction will not issue against threatened 
 trespasses where the complainant cannot allege that he 
 has good title to the property about to be entered upon. 
 Hart vs. Mayor, etc., 9 Wend. 571 ; Schoonover vs. Bright., 
 24 W. Va. 698; Cox vs. Douglass, 20 W. Va. 175; Tate vs. 
 Vance, 27 Oral. 571. Whether these cases, which nearly 
 all concern the occupation of private property, would ap-
 
 171 
 
 ply to the case at bar, may admit of question, but they 
 certainly suggest forcible analogies of it."* 
 
 Judge Taft omitted to refer to what Judge Lurton, 
 with his approval, had said in the Court of Appeals, 76 
 Fed. 317, speaking of the remedies of the city: 
 
 "A litigant may not execute his own decree. If tin; 
 adversary will not quietly surrender the subject of liti- 
 gation resort must be had to the court in which the 
 right was declared for the proper legal writ, and for 
 its regular execution. It is, therefore, proper under the 
 allegations of the bill as to the purposes of the defendant 
 (the city of Cincinnati), to enjoin it from taking into 
 its own hands the enforcement of the decree of the state 
 court." 
 
 This was more than an authority; it was an adjudica- 
 tion in the very matter before the court; and it was as 
 conclusive and binding on the Circuit Court as any other 
 part of the opinion of the Court of Appeals. 
 
 Thus it appears that the learned Circuit Judge cast a 
 doubt on a proposition of law, which he had helped to 
 settle, and finally so, as far as the parties to this litiga- 
 tion were concerned. 
 
 Having considered the four questions raised by the 
 counsel for the street railway company, Judge Taft 
 proceeds to say : 
 
 The doubts cast by Judge Taft on the question whether the city had a right to 
 dispossess the inclined plane company by force, were wholly dispelled by him in 
 delivering the opinion of the United States Circuit Court of Appeals, Lurton, Circuit 
 Judge, and Clark, District Judge concurring, in the subsequent case of Iron Mountain 
 Ry. Co. v. Memphis 37 C. C. A. 410, 421, 422; 96 Fed. 113. 
 
 On the authority of Railroad Co. v. Johnson 119 U. S. 608, and other English 
 and American cases it was held that the city had no such right, but was compelled 
 to resort to legal means. 
 
 Judge Taft's action, at the circuit, in the case of the inclined plane company 
 was more a display of his skill in diplomacy than his skill in the law. What he 
 thought the court could not do directly, he accomplished by restoring possession to 
 the inclined plane company, and reading the riot act to the legislative board of the 
 city of Cincinnati, and to the Cincinnati Street Railway Company. His diplomacy was 
 exercised in the interest of the public, and it is no stretch of authority for a judge 
 to act as a conservator of the peace.
 
 172 
 
 "As will be seen, I am not deciding definitely any of 
 the issues of law raised by the counsel for the inclined 
 plane company. I am only stating what appears to be 
 sufficient to show that the claims made by them are at 
 least of doubtful validity. This court does not decide 
 that Judge Smith's order may not operate as an injunc- 
 tion, or that the city has the right to abate the wrongful 
 occupation of the streets by the inclined plane company. 
 All that is held is that, if the obstacle of the receiver- 
 ship is removed from the course of the city, it could 
 urge reasonable arguments to sustain both propositions 
 in defense of action taken by it on the faith of their 
 validity. In such a case this court ought not, by the 
 possession of its receiver, to prevent the city from taking 
 such course with respect to a remedy as it may be ad- 
 vised. The whole risk of any course taken must be upon 
 the city. If it does an act in contempt of the superior 
 court, its agents must answer there. This court assumes 
 no responsibility for any action the city may take, but 
 it is the court's duty to remove the insuperable obstacle 
 to the city's exercising a choice of remedies interposed 
 by the receiver's possession of the invalid portion of the 
 line." 
 
 Judge Taft then pointed out that the city could not 
 exercise the power to remove the street railways as a 
 nuisance, until the legislative board had declared them 
 such, and he concluded by announcing the decree of the 
 court as follows : 
 
 "The order of the court upon the petition of the city 
 will therefore be as follows: That from and after the 
 receipt by the receiver of a notice from the board of legis- 
 lation that his operation of the inclined plane railway in 
 any of the streets in which by the decree of the Circuit 
 Court of Appeals and grants owned by said inclined com-
 
 173 
 
 pany have expired, is unlawful and forbidden, the re- 
 ceiver is enjoined from operating the railway in such 
 streets, and he is directed to surrender possession of the 
 property of the inclined plane company in place in such 
 streets to said inclined piane company; and it is fur- 
 ther ordered that, upon written application filed herein 
 by the Louisville Trust Company, the receiver shall de- 
 liver possession of all the remainder of the property of 
 the inclined plane company now in his custody to said 
 company, on the condition, consented and agreed to in 
 writing, and filed herein by said company, that it will 
 turn over to the receiver herein the monthly net earn- 
 ings from the operation of its property, after payment of 
 the running expenses thereof, including salaries, wages 
 and supplies. And the receiver is ordered, within two 
 weeks hereof, to file a full and complete account of the 
 receipts and disbursements for the entire period of his 
 receivership. Each party will pay its own costs in this 
 proceeding." 
 
 Judge Taft wound up his opinion by reading the riot 
 act to the legislative body of the city, in the following 
 emphatic language: 
 
 "What has been said disposes of the pending questions. 
 I only wish to add, in order that my language may not 
 be misunderstood, that I have not intended, in the slight- 
 este degree, to advise a resort by the city to violence to 
 enforce its rights in the streets. On the contrary, I 
 think it would be deplorable if the city authorities, not 
 accepting the weighty suggestion of the superior court in 
 its order of suspension, and not abiding the expiration 
 of that order, should foreclose reasonable negotiation, and 
 disgrace the city's fair name by a course probably lead- 
 ing to a breach of the peace. If the city disregards the
 
 174 
 
 suggestion contained in the superior court's order of 
 suspension, it does so at its own risk, and cannot rely 
 on any approval of such a course by this court. All that 
 this court decides is that, when the city demands the 
 right to pursue remedies to enforce rights in the streets 
 adjudged to belong to it by two courts of last resort, 
 this court will not. protect a party which is violating 
 those rights by throwing the shield of its receivership 
 over such violation. It will discharge the receiver, and 
 let the inclined plane company, on the one hand, take 
 the risk of operating the invalid portions of the road, 
 if it chooses, and the city, on the other, that of any 
 course it may see fit to pursue. The relation of this 
 court to the controversy is merely incidental and ancil- 
 lary, and imposes no duty upon it of distinctly deciding 
 as to the* lawful remedies of the parties, if it can free 
 itself from that relation, as it can and will by the order 
 above set out." 
 
 Xot long' after the delivery of Judge Taft's opinion, 
 the board of legislation following the words of the order 
 of the court, notified the receiver that his operation of 
 the inclined plane street railway in the streets where the 
 grants had expired was "unlawful and forbidden," and 
 thereupon, the receiver surrendered possession of the 
 property to the Cincinnati Inclined Plane Railway Com- 
 pany, first requiring that company to agree to turn over to 
 the receiver the monthly net earnings. 
 
 The board of legislation refused to make renewal grants 
 to the Cincinnati Inclined Plane Railway Co., but did 
 grant the streets in question to the Cincinnati Street 
 Railway Company. 
 
 The Cincinnati Inclined Plane Railway Company, then 
 filed a cross-complaint, in the case in the Superior Court,
 
 175 
 
 and April 13, 1897, obtained an order restraining the 
 city of Cincinnati and the Cincinnati Street Railway 
 Company from interfering by force or otherwise with 
 the operation of the street railway until the expiration 
 of the stay of the injunction for six months from Decem- 
 ber 19, 1896. 
 
 On June 18, 1897, the day before the stay expired, a 
 further stay was granted until June 25, and on June 24, 
 it was further extended to June 30, 1897. 
 
 On June 23, 1897, the state Supreme Court, constru- 
 ing the statutes fixing the jurisdiction of the Superior 
 Court in special and in general term, held that the order 
 of suspension of December 19, 1897, the injunction of 
 April 13, 1897, and the orders of suspension of June 18 
 and 24, 1897, were void. (Cincinnati vs. Railway Co., 
 56 Ohio St. 675.) 
 
 June 24, 1897, the Superior Court vacated its orders, 
 and the litigation was at an end. 
 
 This left the city of Cincinnati, and the Cincinnati 
 Street Railway Company at liberty to dispossess the In- 
 clined Plane Railway Company, but they were appar- 
 ently unwilling to stop the operation of this street rail- 
 way line, which ran from the business portion of the 
 city to the Zoological Garden, as they permitted the 
 Inclined Plane Company to continue the operation of the 
 line under the financial supervision of the receiver, until 
 all the property of the Cincinnati Inclined Plane Railway 
 Company was purchased at foreclosure sale, by the Cin- 
 cinnati Street Railway Company, April 14, 1898. 
 
 There are two significant things connected with this 
 litigation:
 
 176 
 
 (1) The State Supreme Court and the United States 
 Circuit Court of Appeals, both held, that the power vest- 
 ed by statute in the local authorities to agree on the 
 terms and conditions on which they would consent to 
 the occupation of the streets by a street railway com- 
 pany included the power to fix the duration of the grant, 
 and after its expiration the street railway company would 
 not be lawfully in the streets and might be enjoined from 
 operating therein. 
 
 (2) That in Cincinnati, the city, its new grantee, the 
 Cincinnati Street Railway Company, and its old grantee, 
 the Cincinnati Inclined Plane Railway Company, recog- 
 nized the paramount right of the public, to have the 
 operation of the street railway continued after the ex- 
 piration of the grant, and it was so continued until 
 title to the property lawfully passed, and possession could 
 be surrendered and taken without stopping the oper- 
 ation of the street cars. 
 
 In the case of the Cincinnati Inclined Plane Railway 
 Company, the state court held, that the grant made in 
 1864 for twenty years, expired by its own limitation 
 in 1884, and another grant made in 1871, expired in 
 1891, and that these grants had not been extended by 
 an act of the legislature passed in 1877, giving inclined 
 plane railroad companies, organized as steam railroads, 
 power to own and operate street railways. 
 
 The company held other grants which had not ex- 
 pired by their own limitation and one that was without 
 a time limit, but the state courts disposed of them, by 
 holding that they were invalid because they were granted 
 as extensions of a steam railroad, and not as extensions 
 of a street railway line.
 
 177 
 
 The opinion of the superior court which was adopted 
 by the state supreme court did not discuss or consider 
 the question whether the act of 1877 had not validated 
 the grants .which were held void. Judge Lurton, in de- 
 livering the opinion of the court of appeals, held tlui 
 inasmuch as the state courts had not touched upon the 
 question, the federal court was at liberty to dispose of 
 it on its own judgment. 
 
 He said: 
 
 "This is a question res Integra. The opinion of the 
 state court does not directly deal with this as a distinct 
 question. It is true that the court did hold that the 
 ordinances of 1871 and Ocober, 1875, by which the in- 
 clined plane railroad company has been permitted to ex- 
 tend its railroad from the base of its incline to the heart 
 of the city, at Walnut and Fifth streets, and from the 
 top of the incline to the corporation line at the Zoological 
 Garden, were invalid, on the ground heretofore stated, 
 but the court does not consider the curative effects of the 
 act of 1877. This question is one upon which the Ohio 
 court has expressed no definite opinion, and if the decree 
 is of no effect, as res adjudicata, this court is clearly at 
 liberty to pronounce an independent judgment as to the 
 legal effect of the act in question in validating the then 
 existing contracts between the city and the Cincinnati 
 Inclined Plane Railroad Company, and this independently 
 of the ground stated in a former part of this opinion." 
 
 Having held that the judgment of the state supreme 
 court was not res adjudicata, Judge Lurton proceeded 
 to hold that the act of 1877 did validate the grants held 
 void by the state courts, and that the grant without any 
 time limitation was perpetual. To this extent thie court 
 of appeals overruled and modified the judgment of the 
 state court, and remanded the case to the United States
 
 178 
 
 Circuit, with directions to enforce the views expressed 
 by Judge Lurton. % 
 
 Four elaborate opinions were delivered in that con- 
 troversy, one in the state courts, and three in the federal 
 courts. In neither of them was any consideration given 
 to the rights of the public. Judge Lurton did incident- 
 ally say, "The city was but a trustee, acting for the pub- 
 lic in respect of the granting of street easements." 
 
 And Judge Taft in remiting the parties to such reme- 
 dies as they might have after the possession of the prop- 
 erty was restored to the Cincinnati Inclined Plane Rail- 
 way' Co., did say: "The question whether the public 
 would or should be inconvenienced by practically destroy- 
 ing this line is one the responsibility of deciding which 
 may justly be put upon this chief municipal body, and 
 ought to be avoided as far as possible by this court." 
 
 Whether the general public had any rights which the 
 city authorities or the courts were bound to respect, was 
 not considered or passed upon, and I am, therefore at 
 liberty to follow the example set by Judge Lurton, and 
 to say, that the question is res 'Integra, that is, untouched 
 and not decided or adjudicated. 
 
 The grant, without any time limit, held by the Cincin- 
 nati Inclined Plane Railway Co., was made in December, 
 1871, and .before there was any statute in Ohio prohibit- 
 ing street grants for more than twenty-five years. Such 
 an act was not passed until May 14th, 1878. The act of 
 May 1, 1852, under which the Cincinnati Inclined Plane 
 Railway Co. was incorporated as a steam railroad, con- 
 tained this section. 
 
 "Sec. 12. If it shall be necessary, in the location of 
 any part of any railroad, to occupy any road, street, alley,
 
 179 
 
 or public way, or ground of any kind or any part thereof, 
 it shall be competent for the municipal or other corpor- 
 ation or public officer or public authorities, owning or 
 having charge thereof, and the railroad company to 
 agree upon the manner and upon the terms and condi- 
 tions upon which the same may be used or occupied; and 
 if said parties shall be unable to agree thereon, and it 
 shall be necessary in the judgment of the directors of 
 such railroad company to use or occupy such road, street, 
 alley, or other public way or ground, such company may 
 appropriate so much of the same as may be necessary for 
 the purpose of such road, in the same manner and upon 
 the same terms as is provided for the appropriation of 
 the property of individuals by the tenth section of this 
 act." 
 
 The Ohio street railway act of 1861 provided that no 
 street railway should be constructed or commenced until 
 the consent of the corporate authorities had been obtained, 
 and such authorities were made competent to agree "upon 
 the manner and upon the terms and conditions," upon 
 which the street railway should be constructed. (Line* 
 of Ohio, 1861, p. 66.) 
 
 But in cities of the first class having a population ex- 
 ceeding 80,000, the consent of a majority in interest of the 
 'owners of the abutting property was required, and no 
 grant could be made, except to the person or corporation 
 which would, on advertised proposals, agree to carry pas- 
 sengers at the lowest rates of fare. (Laics of Ohio, 1860, 
 p. 19, Sees. 15-16.) 
 
 These statutory provisions, coupled with the provision 
 of the act of 1878 prohibiting local grants for more than 
 twenty-five years, and a provision providing for renewal 
 grants without a letting on advertised proposals, are still 
 in force, and have been hereinbefore quoted.
 
 180 
 
 The state and federal decisions in Ohio, on which I 
 have commented, may be entitled to great weight, in any 
 future case in that state in which the rights of the general 
 public are presented and insisted upon, but they are not 
 authority in Michigan, and can have no weight in deter- 
 mining the law of Michigan. 
 
 In Ohio, a local street grant is held to be a state fran- 
 chise, subject to inquiry by proceedings in the nature of 
 a quo warranto. (State vs. Cincinnati Gas Light & Coke 
 Co., 18 Ohio St. 262.) 
 
 In Michigan it is settled law that a municipal street 
 grant is a mere contract or license and is not a franchise 
 subject to inquiry by quo warranto. (Maybury vs. Mutual 
 Gas Light Co., 38 Mich. 154.) 
 
 The Ohio court evidently was of the opinion that the 
 local authorities in making a street grant act entirely in 
 the capacity of agents of the state, and therefore, a time 
 limitation prescribed by them is the act of the state, and 
 determines the duration of the grant. 
 
 On the other hand the Michigan court was of the opin- 
 ion that the local authorities in fixing the terms and con- 
 ditions and rates of fare, of a street grant, act in their 
 own behalf as representatives of their local constituencies, 
 and do not, as to these matters, act as agents of the state 
 at all. 
 
 Hence, a time limitation prescribed by them, can only 
 relate to the terms and conditions and the rates of fare 
 and cannot affect the franchise to maintain and operate 
 granted by the state, nor limit the duration of the local 
 consent to the exercise of that franchise on the streets 
 designated in the grant. 
 
 Will have something more to say on this subject bye 
 and bye.
 
 181 
 
 Other street grants held by the Cleveland Electric Rail- 
 way Company expired February 10, 1908. The routes 
 affected were much more important to the public than the 
 Garden street line, and the experience of the public, the 
 company and the city in the case of that line, put the 
 company and the city administration in a more amicable 
 state of mind. 
 
 A public appraisal of the property and franchises of 
 the company was made in open sessions of the common 
 council. That appraisal is known as the Goff-Johnson 
 appraisal. All of the street railways in Cleveland were 
 then put in the possession and control of the Municipal 
 Traction Company, organized under the auspices of the 
 Mayor Johnson, with a nominal capital, for the purpose of 
 acting as a holding company, and to enable it, if it could, 
 to operate the street railways of Cleveland, for three-cent 
 fares. 
 
 This plan proved a failure, although every effort was 
 made to reduce the cost of the service, with the result that 
 a bill in equity was filed in the United States Circuit 
 Court by the Central Trust Company, of New York, 
 which held mortgages on the property of the Cleveland 
 Electric Railway Company. 
 
 Receivers were appointed November 12, 1908, and they 
 have since iJien been in charge of the property under the 
 direction of the court. 
 
 Finally the company and the city agreed upon terms of 
 an adjustment and a renewal grant for twenty-five years 
 to the Cleveland Railway Company, the successor of the 
 Cleveland Electric, with certain exceptions, among them 
 the value of the street railway property and the rates of 
 fare, below the maximum of four cents cash fare, seven 
 tickets for twenty-five cents, and one cent for a transfer. 
 As to these matters the parties were not able to agree.
 
 182 
 
 but were constrained to leave them to the arbitration of 
 United States District Judge Robert TV. Tayler, not in 
 his judicial capacity, but as a private arbitrator. 
 
 Judge Taylor's decision as arbitrator was delievered to 
 the common council of the city December 18, 1909, and 
 that body immediately passed the ordinance, previously 
 drafted, partly in blank, giving his decision effect. 
 
 Judge Tayler's Decision. 
 
 "Cleveland, O., Dec. 17, 1909. 
 
 "To the council of the city of Cleveland and the Cleve- 
 land Railway Co., Cleveland, O. Gentlemen: I make 
 the following report, in reply to your communication of 
 October 5, submitting to me, as an arbitrator, the decision 
 of certain questions involved in the settlement of the 
 street railway situation in this city, and, also, my report 
 on the question submitted to me by the Municipal Trac- 
 tion Co., the Forest City Railway Co., and the Low Fare 
 Railway Co., respecting the obligation arising out of the 
 guarantee of the stock of the Forest City Railway Co., and 
 of so much of the stock of the Cleveland Railway Co. as 
 was sold through the Municipal Traction Co. and by it 
 guaranteed in certain terms: 
 
 "1. The value of the physical property of the Cleve- 
 land Electric Railway Co., as of January 1, 1908, was 
 117,511.305.64. 
 
 "2. The franchise value of the company's franchises, 
 as of that date, was $3,615,843.89. 
 
 "3. The total value of all of the property of the Cleve- 
 land Electric Railway Co., I find, therefore, to be 
 121,127,149.53, being something more than $1,000,000 less 
 than that which was found by the Goff-Johnson appraisal. 
 
 "4. I allow nothing for good will. A street railway 
 company which has a monopoly, and especially if it has a 
 franchise value remaining, can have no good will value.
 
 183 
 
 "5. I allow nothing for going value, except in so far 
 as that is the result of the necessary expenditure of money 
 in building the road, acquiring its land, power houses and 
 equipment and putting them into successful operation. 
 The expenditures for these purposes are, and necessarily 
 must be, included in the valuation of the physical prop- 
 erty. 
 
 "6. I offset the franchise value of suburban grants, 
 whatever they may amount to, against the burdens of 
 suburban contracts, to whatever extent they may exist, for 
 the reason that all the territory covered by the Cleveland 
 Electric lines is one homogeneous community, destined 
 soon to become one municipality in which a zone system 
 will be intolerable. 
 
 "7. I am of opinion that there is a moral, and, perhaps 
 a legal obligation on the community in connection with 
 the guarantee by the Municipal Traction Co. of stock of 
 the Forest City Railway Co., and of stock of the Cleve- 
 land Railway Co. sold by the Municipal Traction Co. In 
 view of the fact that the settlement recommended by me, 
 should it become operative, will make the stock of the 
 Cleveland Railway Co., in my opinion, intrinsically worth 
 par, I recommend that the obligation created by the guar- 
 antee be adjusted by the payment, to the persons who 
 originally purchase the same on the faith of the guarantee, 
 of an amount equal to 7^ per cent, of the par value of 
 such guaranteed stock so owned, and that the principal 
 be applied, to fractional shares according to the actual 
 amounts paid thereon; such payments to be in full satis- 
 faction of all liability under the guarantee. 
 
 "I fix the amount at 7y 2 P er cen t because, prior to 
 October 1, 1908, all such stockholders had received inter- 
 est, or dividends at the rate of 6 per cent per annum. 
 
 "Something less than 10 per cent of the guaranteed 
 stock has been sold by the original purchasers. To wlinr
 
 184 
 
 extent, if any, these former owners of such stock may be 
 entitled to any reimbursement under the guarantee I am 
 willing to consider hereafter. The amount involved can 
 in no event be a very large sum, as less than 10 per cent 
 of all the guaranteed stock has changed hands. 
 
 "The practical result of the reduction in the value of 
 the Cleveland Railway Co. property will be to make the 
 stock of that company not having an origin in the Munici- 
 pal Traction Co.'s guarantee -worth, as of January 1, 1910, 
 par and 1% per cent, being the amount accruing to such 
 stockholders for the quarter ending October 1, 1908, and 
 thus equalizing for that period those stockholders with the 
 stockholders whose stock came under the guarantee. 
 
 "As to the guaranteed stock still in the hands of the 
 original purchasers, it will be worth, as of January 1, 
 1910, par and 7^/2 P er cent. 
 
 "8. The initial rate of fare should be 3 cents and 1 
 cent for a transfer, without rebate, and the maximum 
 rate should be 4 cents for a single fare, seven tickets for 
 25 cents and 1 cent for a transfer, without rebate. 
 
 "9. I approve the suggestion that, if consents of abut- 
 ting property owners are secured, the company be required ' 
 to extend its line on Lorain avenue to the city limits, if 
 no fair arrangement can be made with the interurban 
 company for the use of its tracks. Yours truly, 
 
 "ROBERT W. TAYLER." 
 
 After eight years of street railway war, peace was 
 finally reached by the decision of a United States judge, 
 but how much better it would have been, if at the expira- 
 tion of the Garden street grant, the City of Cleveland had 
 filed a bill in equity in a state court of competent juris- 
 diction, alleging that the rates of fare being charged by 
 the Cleveland Electric Railroad Company were excessive, 
 and in an orderly and legal manner, under the safeguards 
 and restrictions of a regular legal proceeding, the question
 
 185 
 
 of the reasonableness of the rates of fare charged, had 
 been judicially determined and decreed. The decree of 
 the trial court could have been reviewed in the state Su- 
 preme Court, and if need be in the Supreme Court of the 
 United States. If the citizenship of some of the parties 
 in interest, or the questions presented, justified it, the 
 case could have been removed to the Federal Court, and 
 the Supreme Court of the United States reached by that 
 route. 
 
 No one having any regard for law, order and justice 
 can doubt the superiority of such a method of settling 
 the matters in dispute, as compared with what did actu- 
 ally take place. 
 
 For eight years the people of Cleveland were disturbed 
 by a series of plots, and counter plots, suits and injunc- 
 tions, appeals to popular and class interests, and election 
 after election, all over tne street railway question and 
 three cent fares. 
 
 After the opposing forces had exhausted their energies, 
 the ability, honesty and sense of justice, of a trained 
 jurist, holding a responsible official position and having 
 no mentor but reason and truth, settled all the serious 
 matters in .dispute, and brought peace and harmony to 
 the disquieted city. 
 
 Is there any possible reason in law or logic why the 
 result finally reached could not have been worked out 
 at the inception of the controversy, and the street railway 
 war brought to a close before it had fairly commenced. 
 
 The ordinance designated to settle the Cleveland street 
 railway controversy is an extraordinary instrument and 
 is an attempt to automatically adjust the rates of fare, 
 from time to time, according to the net earnings of the 
 company. It will be printed in the appendix and com- 
 mented on in the XII. subdivision hereof.
 
 ISO 
 
 XI. 
 
 The final and conclusive argument in support of the 
 proposition that the local consent is perpetual, and 
 only the terms and conditions and the rates of fare 
 are subject to time limitations, is found in the fact 
 that in making a street grant the local authorities act 
 in two different capacities: (1) in granting the local 
 consent and designating the streets, the aldermen act 
 as the agents of the state under authority delegated 
 to them by the legislature; and (2) in agreeing with 
 a street railway company on rates of fare, and the 
 other terms and conditions, the aldermen by per- 
 mission of the legislature act as the contractual 
 agents and representatives of the people of the 
 municipality, in virtue of their election by the people 
 to manage and control their local affairs. 
 
 A municipal street grant duly accepted by the grantee 
 is an inviolable contract according to the decisions every- 
 where in the United States, but it must not be assumed 
 that in granting their consent the local authorities do not 
 to any extent act as agents of the state, and wholly in 
 their own behalf. 
 
 Under the Michigan constitution of 1850 the control of 
 the streets and highways was vested in the legislature, 
 and street railway companies and other public service 
 corporations could be authorized to occupy the streets 
 without the assent of the local authorities. If the legisla- 
 ture saw fit to fix the terms and conditions and the rates 
 of fare, and simply required the local consent, without any 
 power in the local authorities, except that of consenting or
 
 187 
 
 refusing, there would be no question, but that they would 
 be acting as the agents of the state and in no other ca- 
 pacity whatever. 
 
 In such a case the act of the legislature would not take 
 effect until the local consent was granted. It would be 
 like the Michigan local option law, which does not take 
 effect in any county until prohibition is adopted by a vote 
 of the people of the county, and like many other laws 
 which do not become operative until approved and adopted 
 by a popular vote. Requiring a popular vote or the ap- 
 proval of the board of supervisors of a county, or of the 
 common council of a city, is the same thing, and it has 
 never yet been supposed that either the electors or the 
 local legislative body, could place a time limitation on 
 their consent, approval or adoption. They can only say 
 yes or no; and to qualify their action by limiting it to a 
 fixed period of time would be wholly beyond their au- 
 thority. 
 
 This view of the local power is not changed because in 
 addition to the power to consent, approve or adopt, or not, 
 the local authorities are given power to impose terms and 
 conditions and rates of fare. These they can prescribe for 
 a limited period, but they can not so qualify their consent, 
 approval or adoption. 
 
 When the local authorities have consented to the occu- 
 pation of certain designated streets by a street railway 
 company, and the grant has been accepted and the road 
 Constructed, the consent is as permanent and perpetual as 
 the public improvement itself is intended to be, and any 
 time limitation agreed upon can only apply to the terms 
 and conditions and rates of fare. 
 
 The local consent when granted gives force ami cilVrt 
 to the act of the legislature conferring on street railway
 
 188 
 
 corporations the franchise of constructing, maintaining 
 and operating street railways on the public streets. 
 
 It is indeterminable and irrevocable. 
 
 National Foundry and Pipe Works vs. Oconto, 52 Fed. 
 29, is a case where Judge Jenkins, a distinguished and 
 able member of the federal judiciary, had occasion to con- 
 sider the nature of a local street grant. 
 
 The law under which the Oconto Water Company was 
 organized provided that "any corporation formed for the 
 purpose of constructing and operating waterworks in any 
 city or village to supply such city or village with water 
 for fire and other purposes upon such terms and condi- 
 tions as may be agreed upon, and may, by the consent of, 
 and in the manner agreed upon with the proper authori- 
 ties of such city or village, use any street, alley, lane, 
 park or public grounds for laying water pipes therein; 
 * * * and any such city or village may, by contract 
 duly executed by the proper authorities, acquire the right 
 to use the water supplied by such corporation, or such 
 portion thereof as it may desire, upon such terms and con- 
 ditions as may be agreed upon by such corporation and 
 authorities of such city or village." 
 
 By Sec. 930a, of the statutes of the state, the common 
 council of every city was authorized to permit, subject to 
 such rules and regulations as may be imposed, the laying 
 of pipes in the streets of the city, and their maintenance 
 and use for the purpose of conveying water or steam under 
 the surface of the streets. 
 
 On July 9, 1890, the city of Oconto made a grant to the 
 Oconto Water Company for the period of thirty years, and 
 September 13, 1890, the company transferred to Andrews 
 & Whitcomb, as security for a loan, the entire issue of the 
 stock of the company together with "all the rights, priv-
 
 189 
 
 ileges, immunities, franchises and powers, of whatsoever 
 name and nature, which were granted unto the said 
 Oconto Water Company in and by that certain ordinance 
 passed by the common council of said city of Oconto and 
 approved by the mayor of said city on the 9th day of July, 
 1890." 
 
 The mains, pipes and plant of the company were not 
 transferred, and the question in the case was whether An- 
 drews & Whitcomb got any rights by the transfer of the 
 local contract, and whether the transfer carried with the 
 local contract the franchise to operate the plant. 
 
 After referring to the statutory provisions, the learned 
 judge said: 
 
 "The city is therefore only authorized to permit the lay- 
 ing of pipes in the streets, and their maintenance and use. 
 (Section 930a). That is not a grant of power to bestow 
 a franchise, but permission to suffer an easement. The 
 law of its incorporation confers upon the Oconto Water 
 Company its franchise (1) to oWn and operate the water- 
 works, and (2) to use the streets of the city. Sanb. & 
 B. St., 1780. The former power is without condition ; 
 the latter is subject to the assent of the municipality. The 
 practical efficacy of the franchise may depend upon the 
 discretionary act of the city. The franchise is not, how- 
 ever, derived from that discretion, but from the will of the 
 legislature. The law authorizes the city to assent to the 
 exercise of a power granted by the statute. The grant of 
 power to the water company as to the use of the streets- 
 becomes operative only upon the happening of that contin- 
 gency of municipal assent. That is not a grant of power 
 to a city to confer a franchise. Sims vs. Railway Co., 37 
 Ohio St. 556. The matter is somewhat analogous to tin- 
 case of an act of the legislature taking effect only upon 
 the assent of the people expressed at the polls, which is
 
 190 
 
 now generally held to be valid, upon the ground that the 
 law derives its potency from legislative will, and not from 
 the assent of the poll. So, here, the right to use the 
 streets was conferred upon the Oconto Water Company 
 by the law of its incorporation, subject to the contingency 
 of the assent of the city. The franchise emanates from the 
 legislature, not from the municipality. The ordinance is 
 not an exercise of legislative power, but of the right to 
 contract. (Indianapolis vs. Gaslight Co., 66 Ind., 396.) 
 
 "The case of State vs. Madison St. Ry. Co., 72 Wis. 612, 
 40 N. W. Rep. 487, is not in conflict The ruling there 
 was to the effect only that, considering the terms of Eev. 
 St. Wis., 1862, the provisions of the ordinance there 
 under review, by force of the statute, became part of the 
 law of the incorporation of the railway company, and for 
 violation of such provision an action could be maintained 
 by the attorney general to vacate the charter or annul the 
 existence of the railway company, under the provision of 
 Rev. St. Wis., 3241. Applying the doctrine of that case 
 to the one in hand, the most that can be said is that the 
 conditions of the assent of the city to the use of its streets 
 inhere and are part of the law of incorporation of the 
 defendant water company. None the less, however, are its 
 franchises derived from the legislature, and not from the 
 municipality. It is also to be noticed that there is a 
 marked difference in the statute under consideration in 
 that case and those in question here. Section 1862, there 
 considered, provides that "any municipal corporation 
 * * .* may grant to any such corporation" a street 
 railway corporation "such use, and upon such terms as 
 the proper authorities shall determine, of any streets or 
 bridges. * * * Every such road shall be subject to 
 sue! i reasonable rules and regulations * * * as the 
 proper municipal authorities may by Ordinance from time 
 to time determine." There the legislation does not directly
 
 191 
 
 grant to the railway corporation any power to use the 
 streets, but delegates to the municipality the right to 
 grant the power. Here the power is in terms conferred by 
 the legislature upon the water company, subject to the 
 assent of the municipality. There the street railway is 
 subject to constant municipal control. Here the water 
 company is independent of municipal direction except in 
 the use of its streets. It is, I think, clear that the power 
 possessed by the city of Oconto was only to yield its assent 
 to a legislative grant of the use of its streets, and to con- 
 tract for a supply of water. The franchises of the water 
 company were conferred by the legislature of the state, 
 and not by the ordinance of the city. 
 
 "The question then recurs, what rights passed to An- 
 drews & Whitcomb under the instrument of transfer and 
 their foreclosure? By their terms they convey or assign 
 only such rights and privileges as were granted to the 
 water company by the ordinance of the city. No other 
 franchise or rights are attempted to be conveyed. If the 
 right to the use of tie streets may be said to have pro- 
 ceeded from the municipality, it was standing alone, a 
 mere easement. The transfer of such naked right could 
 not carry with it the ownership of the mains, nor the 
 title to the plant as an entirety, nor the franchise to oper- 
 ate the plant, nor to the land upon which the plant was 
 situated. So that if it be true, as is here claimed, that a 
 naked franchise is transmissible ; that the franchise is the 
 main and the plant the incident; and that a transfer of 
 the former carries with it the title to the tangible prop- 
 erty essential to its use and beneficial enjoyment, it still 
 remains that here there was no transfer of the franchise 
 to operate the plant, and consequently no transfer of 
 tangible property. It therefore results that the claim of 
 Andrews & Whitcomtf to the plant is unfounded in law.
 
 192 
 
 and its possession by them wrongful as against the com- 
 plainant." 
 
 In short the court held that the franchise to maintain 
 and operate granted by the state was so connected with, 
 and had such a relation to, the physical property, that a 
 transfer of the local consent without a transfer of the 
 physical property, was inoperative and void. * 
 
 A mechanic's lien on the physical property had been 
 filed and perfected, and on a bill to foreclose that lien, 
 the court held, that the state franchise to maintain and 
 operate should go with the physical property and be in- 
 cluded in the sale thereof. (National Foundry and Pipe 
 Works vs. Oconto Water Co., 52 Fed. 43. ) 
 
 That is to say, whoever owns the physical property, 
 owns the franchise to maintain and operate. Hence a 
 lapse of the local contract can not terminate the franchise 
 to maintain and operate, or in any wise prevent a con- 
 tinuation of the public service. 
 
 The Detroit United Kailway owns the street railways 
 in the city of Detroit and it has a right to operate them, 
 although the local grant has expired by its own limitation. 
 
 The decision of the United States Circuit Court of Ap- 
 peals in Detroit Citizens' Street Railway Company vs. 
 City of Detroit, 12 C. C. A. 365, 64 Fed. Rep. 628, ap- 
 proved by the Supreme Court of the United States in De- 
 troit vs. Detroit Citizens' St. Ry. Co., 184 U. S. 368, 395, 
 that a street grant may extend beyond the life of the cor- 
 poration to which the grant is made is of itself when 
 rightly understood and applied, conclusive authority, that 
 the physical property and the franchise to maintain and 
 operate continue to exist after the expiration of the local 
 grant.
 
 193 
 
 The old Detroit City Railway was organized on the 
 9th day of 'May, 1863, for the period of thirty years, and 
 its corporate life expired May 9, 1893, but the franchise 
 granted by the state to maintain and operate did not ex- 
 pire, because it was so connected with and was so essen- 
 tial to the physical property, that it was not separable 
 from that property, but became a part of it, as the main 
 thing necessary to give it value, and hence that franchise 
 passed to the corporation to which the Detroit City Rail- 
 way before or at its dissolution transferred the property. 
 
 The very same reasoning applies to the situation at the 
 expiration of the local grant. The physical property is 
 still in existence, and the franchise to maintain and oper- 
 ate is still necessary and essential to its further existence. 
 This fact is of just as much consequence, and is entitled 
 to just as much weight at the expiration of the local grant 
 as at the expiration of the grant by the state of the fran- 
 chise of corporate life. 
 
 By what sort of legal reasoning can a greater and more 
 disastrous effect, be given to the expiration of a local 
 contract, than is given to the expiration of a franchise 
 granted by the state. The state franchise to maintain and 
 operate survives the one, why not the other? If any dif- 
 ference is to be recognized should it not be that the local 
 grant being of an inferior nature, and of lesser conse- 
 quence, its expiration ought not to be given as much effect 
 as the expiration of the franchise of corporate existence. 
 
 The physical property with the franchise to maintain 
 and operate may be mortgaged, and sold on foreclosure 
 sale, and may be levied on, and sold on execution sale. A& 
 we have seen a natural person may become the purchaser, 
 although not possessed in his own right of any franchise 
 to maintain and operate.
 
 194 
 
 If a corporation possessed of such a franchise should 
 become the purchaser it could maintain and operate under 
 its own franchise, or under the franchise obtained on its 
 purchase of the property. 
 
 A corporation competent to hold the property could be- 
 come the purchaser, although it did not itself possess any 
 franchise to maintain and operate. Is there any doubt but 
 that a trust company, or a simple bond holding company 
 could become the purchaser and acquire the franchise to 
 maintain and operate? 
 
 "The franchise of being a corporation need not be im- 
 plied as necessary to secure to the mortgage bondholders 
 or the purchasers at a foreclosure sale, the substantial 
 rights intended to be secured. They acquire the ownership 
 of the railroad and the property incident to it and the 
 franchise of maintaining and operating it as such," etc. 
 (Memphis R. R. Co. vs. Commissioners, 112 U. S. 609; 
 New Orleans, etc. R. R. Co. vs. Delamore, 114 U. S. 501.) 
 
 To hold that a municipality in making a street grant 
 could prescribe terms and conditions that would over- 
 throw this wise and wholesome rule of law, would in effect 
 give it a greater power to destroy a right of property than 
 is possessed by the state itself. Indeed it would give it 
 a power that can not be exercised in this country as long 
 as our constitutional guaranties prevail and are enforced. 
 
 Detroit has it's Caesar, and he is wearing a mantle of 
 expired street grants. The lean and hungry Cassius may 
 well inquire of the noble Brutus : 
 
 "Now, in the names of all the gods at once, 
 On what meat doth this our Caesar feed, 
 That he has grown so great?" 
 
 In the Indianapolis street railway case of City Railway 
 Co. vs. Citizens' Railroad Co., 166 U. $. 557, it appeared
 
 195 
 
 that in 1861 the Indiana legislature passed an act author- 
 izing the incorporation of street railway companies, and 
 it was provided that the stockholders in such companies 
 should be a corporation in perpetuity and should have 
 power to construct, maintain and operate street railways, 
 but should not do so in any incorporated city without first 
 obtaining the consent of the common council to the loca- 
 tion, survey and construction of the railroad through or 
 across the public streets of the city. 
 
 The Citizens' Street Railway Company was organized 
 under that act, and the common council of Indianapolis, 
 January 18, 1864, passed an ordinance making a grant to 
 the company for thirty years. April 7, 1880, the ordinance 
 was amended by making the period thirty-seven years in- 
 stead of thirty. 
 
 In 1893 the common council made a grant to a rival 
 company known as the City Railway Company, which 
 authorized it to lay and maintain street railways upon 
 certain streets, many of which were already occupied by 
 the Citizens' Street Railroad Company, which had suc- 
 ceeded the Citizens' Street Railway Company. 
 
 In the United States Circuit Court, Woods, Circuit 
 Judge, delivering the controlling opinion, it was held that 
 the consent of the city had relation, not to the termina- 
 tion of street railway franchises, but rather to the manner 
 of their exercise, and that the provision of the ordinances 
 limiting the duration of the grant was void. 
 
 It was further held that if the original limitation of 
 thirty years was valid, so was the seven years' extension, 
 and the Citizens' Railroad Company was entitled to relief 
 to protect it during the remaining portion of the extended 
 period, viz., to January 18, 1901, (64 Fed. 647).
 
 196 
 
 The Supreme Court of the United States modified the 
 decree below by striking out the words "without regard to 
 any limitation of time mentioned in any ordinance of the 
 city," and the word "forever," but expressly declined to 
 express an opinion upon the question whether the fran- 
 chise from the city was perpetual. Mr. Justice Gray and 
 Mr. Justice White only concurred in the result. Mr. Jus- 
 tice Shiras was of the opinion that the decree should be 
 affirmed without modification. Mr. Justice Harlan did not 
 sit in the case. 
 
 This Indiana case can not "be regarded as an authority 
 on the question of the duration of such municipal street 
 grants. Nevertheless, the reasoning of Judge Woods is 
 entitled to its full weight, because it was not reviewed or 
 overruled by the Supreme Court. 
 
 In the Chicago street railway case, reported as Govin 
 vs. City of Chicago, 132 Fed. 848, and Blair vs. Chicago, 
 201 U. 8. 400, it appeared, that August 15, 1858, the com- 
 mon council of the city of Chicago, passed an ordinance 
 making a street railway grant to three persons, and those 
 who should become associated with them, and which grant, 
 in case the grantees became incorporated, was to pass to 
 the corporation. The ordinance contained terms and con- 
 ditions and fixed the rate of fare at five cents, and it was 
 to "extend to the full time of twenty-five years," and until 
 the city purchased the property. 
 
 The Illinois legislature, February 14, 1859, passed an 
 act making the grantees, and their successors, a corpora- 
 tion for the term of twenty-five years under the name of 
 "The Chicago City Railway Company." This act referred 
 to the ordinance, affirmed its terms and conditions, and 
 vested the local grant in the corporation.
 
 197 
 
 It also created another street railway corporation under 
 the name of "The North Chicago City Railway Company," 
 and conferred on it the like rights, powers and privileges. 
 
 By an act approved February 21, 1861, another street 
 railway company was incorporated for twenty-five years, 
 under the name of "The Chicago West Division Railway 
 Company." The act referred to the act of February 14, 
 1859, as containing the powers granted. 
 
 An act of the Illinois legislature passed over the gov- 
 ernor's veto, February 6, 1865, amended the act of Febru- 
 ary 14, 1859, and the act of February 21, 1861, by striking 
 out of each the words, "for the term of twenty-five years," 
 and inserting in lieu thereof "for ninety-nine years." It 
 was expressly provided that the extension of the period of 
 corporate existence was to be "upon such terms and con- 
 ditions and with such rights and privileges, immunities 
 and exemptions as the common council has or may by con- 
 tract with said parties or any or either of them, prescribe, 
 and any and all acts or deeds of transfer of rights, priv- 
 ileges or franchise, between the corporations in said sev- 
 eral acts named or any two of them, and all contracts, 
 stipulations, licenses and undertakings made, entered into 
 or given, and as made and amended, by and between the 
 said common council, and any one or more of the said cor- 
 porations, respecting the location, use, or exclusion of 
 railways in or upon the streets, or any of them of said 
 city, shall be deemed and held and continued in force 
 during the life hereof" etc. 
 
 In 1903 the property of these Chicago street railway 
 companies passed into the custody of receivers appointed 
 on judgment creditor's bills by the United States Circuit 
 Court for the Northern District of Illinois. The receivers 
 filed ancillary bills to establish the rights of the companies 
 under the act of 1865.
 
 198 
 
 The case was heard before Grosscup and Jenkins, Cir- 
 cuit Judges, who held that as to all the street grants made 
 before the Illinois constitution of 1870 was adopted, the 
 period of their duration had been extended by the act of 
 1865, for ninety-nine years. 
 
 Their decision was reviewed in the Supreme Court, of 
 the United States. The opinion of the court was delivered 
 by Mr. Justice Day. Looking at each of the local grants 
 as an entirety, and antedating as they did the creation of 
 the corporations, and regarding them as within the charter 
 powers of the common council, without other legislative 
 sanction, it was held that the local grants were not ex- 
 tended by the act of 1865. 
 
 Justices McKenna, Brown and Brewer dissented in an 
 opinion by Justice McKenna, in which the majority opin- 
 ion was reviewed and criticised. 
 
 Both opinions are learned and able, but the conflict of 
 arguments and reasons leaves the subject in a sort of in- 
 tellectual Gordian knot, difficult to untie, but easily sev- 
 ered and separated into two parts. 
 
 Applied to the rates of fare and the other terms and con- 
 ditions of the municipal street grants, the majority opin- 
 ion is sound and convincing, but in so far as it fails to 
 separate the franchise, emanating from the state, of main- 
 taining and operating the street railways and the local 
 consent to its exercise in the streets designated and occu- N 
 pied on the one hand, from the terms and conditions and 
 rates of fare of the local grants and contracts on the 
 other, it is, from my point of view, clearly erroneous. 
 
 The minority opinion applied to the franchise to main- 
 tain and operate and the local consent, is unanswerable, 
 but when applied to the terms and conditions and rates of
 
 199 
 
 fare, it is erroneous, and is fully answered by the majority 
 opinion. 
 
 The one opinion goes too far in one direction, and the 
 other goes too far in the other direction. Neither is alto- 
 gether sound or unsound. The counsel for the street rail- 
 way companies claimed too much and lost all. If they 
 had made a strong contention in support of the distinction 
 I have endeavored to establish, they might have obtained 
 a decision, that although the local contracts had expired, 
 the right to maintain and operate the street railways, sub- 
 ject in the absence of new contracts, to common law obli- 
 gations, had been extended for ninety-nine years, and for 
 as much longer as the physical property of the companies 
 remained in existence, and in their ownership or that of 
 their successors and assigns. 
 
 It is quite clear that all of the learned judges of the 
 Supreme Court of the United States could have harmon- 
 ized their views on the line of demarkation which I have 
 attempted to draw. 
 
 This much can be said in behalf of the counsel for the 
 street railway companies, that they had a very strong case 
 on both aspects of the question, and they are pardonable 
 for not having been able to foresee that Mr. Justice Day 
 and his associates would have the learning and ability to 
 defeat a good part of their case, and in doing so would 
 sweep their whole case away. 
 
 The decision of the Supreme Court of the United States 
 in the Chicago street railway case can have no value as an 
 authority in the determination of the Michigan case we 
 have in hand, for the very good reason that the question 
 presented was one of statutory construction, concerning 
 the meaning of an extraordiary act of the legislature of 
 Illinois extending the corporate life of certain street rail-
 
 200 
 
 way companies from twenty-five to ninety-nine years, and 
 which act it was claimed, also made a like extension of 
 the municipal street grants held by the companies. The 
 local grants had all been made for twenty-five years, or 
 less, and it was claimed that the act of the legislature ex- 
 tended them for ninety-nine years, as well as the corporate 
 life of the companies. 
 
 The court, without violating any of the recognized rules 
 of construction, reached the conclusion that the local 
 grants were not extended. 
 
 Whatever conclusion one may reach as to the merits, as 
 an authority in other cases, of the decision of the Supreme 
 Court of the United States in the Chicago street railway 
 case, it can be asserted without any danger of successful 
 contradiction, that the court did not express any opinion 
 on what the rights and remedies of the parties and of the 
 general public would be in case the city of Chicago had 
 undertaken by injunction or otherwise to dispossess the 
 street railway companies and to compel a cessation of the 
 public service. 
 
 It is not conceivable that any court would ever have 
 required or permitted the street railway companies of 
 Chicago (serving as they do, in whole or in part two mil- 
 lions of people), to stop operating their cars over the 
 streets of the city for even one day. 
 
 The Supreme Court of the United States has never ren- 
 dered a decision making such a result possible, and from 
 what we can judge of the decisions in the analogous cases 
 cited in other parts of this brief, it is not likely the court 
 ever will render any such decision. 
 
 The decision of the Supreme Court of the United States 
 in the Chicago Street Railway case of Blair vs. Chicago,
 
 201 
 
 201 U. S. 400, left the street railway companies in pos- 
 session of the streets under a number of local grants 
 which had expired. 
 
 The state legislature passed an act authorizing muni- 
 cipal ownership, but the proposition was defeated by the 
 electors of the city, whereupon the city and the street 
 railway companies came to an amicable adjustment. It 
 was found and agreed that the property, owned and con- 
 trolled and to be acquired by the Chicago City Railway 
 Company was of the value of $21,000,000 and that of the 
 Chicago Railways Company was $29,000,000. 
 
 The rates of fare, with transfers, were fixed at five 
 cents for each passenger twelve years of age or over, and 
 three cents for each passenger under twelve years of age; 
 children under seven years of age accompanied by a per- 
 son paying fare to be carried free. 
 
 The gross earnings of the street railways and from 
 all sources, are to be applied: 
 
 (1) Operating expenses, maintenance and repairs 
 and taxes; and after three years, six per cent of gross 
 receipts shall be set apart for a maintenance and repairs 
 fund, and eight per cent for a renewals and depreciation 
 fund. 
 
 (2) Interest at five per cent on the capital investment 
 of $50,000,000 and such additions thereto as are author- 
 ized by the ordinances. 
 
 (3) The residue of the gross receipts to be divided 
 between the company and the city; forty-five per cent to 
 be retained by the company, and fifty-five per cent, to be 
 paid to the city. 
 
 The city is given the right to purchase the property 
 at any time on payment to the company of the capital in- 
 vestment; and, subject to certain qualifications, the city
 
 202 
 
 can authorize any other street railway company as its 
 licensee to purchase the property at the same price, plus 
 twenty per cent thereof. 
 
 If the city or its licensee does not purchase the property 
 prior to February 1, 1927, the city agrees not to grant the 
 streets to a new company, except on the condition that 
 such new company will purchase the property upon the 
 same terms as the city might then purchase it. 
 
 The two ordinances of February 11, 1907, have the same 
 general terms and provisions, and are only different in 
 matters of detail, necessary to adapt them to each com- 
 pany separately. 
 
 A copy of the ordinance granted to the Chicago City 
 Railway Company will be printed in the appendixes as 
 No. 2. 
 
 It is a recognition by the city of the permanent and per- 
 petual nature of street railway property, and it precludes 
 any destruction or confiscation of the property by the city. 
 
 As I have said such recognition is absolutely necessary 
 to secure as low a fare as five cents. 
 
 The financial results of the Chicago street railway or- 
 dinances for the first year, expiring January 31, 1908, 
 are shown by the published "Report of the Board of Sup- 
 ervising Engineers." Bion J. Arnold is chairman of the 
 board. 
 
 The number of revenue passengers was 372,123,199, and 
 the number of transfers and free passengers was 246,177,- 
 067. 
 
 The following figures were compiled by the board for 
 the purpose of showing what became of the five cents paid 
 
 by each revenue passenger. 
 
 cents. 
 
 Paid in wages to employees 2.24 
 
 Paid for materials, supplies, and other expenses 
 incident to the maintenace, operation and 
 
 management of the railways 1.16
 
 203 
 
 Paid for taxes 10 
 
 Interest on value of properties 75 
 
 Profit paid to the railways 34 
 
 Profit paid to the city ; . .41 
 
 Total 5.00 
 
 The additions to the capital investment during the year, 
 including some made between June 30, 1906, and February 
 1, 1907, amounted to $11,641,192.65, which was mainly ex- 
 pended for the rehabilitation required by the ordinances. 
 
 CHICAGO RAILWAYS COMPANYCHICAGO CITY 
 RAILWAY COMPANY. 
 
 Combined Income Account. 
 For the year ended January 31, 1908. 
 Earnings : 
 
 Passengers $18,464,553.85 
 
 Chartered cars 6,227.50 
 
 Mail cars 56,420.41 
 
 Newspaper cars 1,800.00 
 
 Advertising 78,208.32 
 
 Rent of land and buildings 3,472.00 
 
 Rent of equipment 37,569.16 
 
 Sale of power 40,424.57 
 
 Interest on deposit (net) 52,350.48 
 
 Miscellaneous 82,068.02 
 
 Gross earnings $18,823.094.31 
 
 Expenses: Schedule No. 1. 
 
 Maintenance of way and structures. ..$ 1,230,035.42 
 
 Maintenance of equipment 1,473,763.46 
 
 Operation of power-plants 1,933,456. 7: > 
 
 Operation of cars 5,835,092.26 
 
 General expenses 2,039,424.62 
 
 Expense, account investment real estate 53,519.04
 
 204 
 
 Taxes 439,305.53 
 
 Renewals 171,568.95 
 
 Total expenses $13,176,166.01 
 
 Net earnings from operation $ 5,646,928.30 
 
 From which deduct: 
 
 Interest on capital invested at 5# 2,802,167.43 
 
 Net earnings f 2,844,760.87 
 
 Divisible thus: 
 
 City of Chicago, 55# f 1,564,618.47 
 
 Companies, 45# 1,280,142.40 
 
 Operating expenses and renewals, per 
 cent gross earnings 70$
 
 205 
 
 XII. 
 
 There are many practical reasons concerning the 
 welfare and happiness of the people, why the street 
 railway business of the city of Detroit and its suburbs, 
 cannot be conducted on the theory, that at the ex- 
 piration of municipal street grants, the municipalities 
 have the power to dictate terms and conditions and 
 rates of fare, regardless of the question whether they 
 are reasonable or unreasonable. 
 
 If street railways are regarded as permanent public 
 improvements, and the investment therein not subject to 
 destruction at the expiration of the local grants, by an 
 enforced removal from the streets or by an arbitrary re- 
 duction of fares having a like result, the question what 
 is a reasonable rate of fare, is not difficult; but if the 
 capital invested is subjected to these risks, the question 
 is fathomless. 
 
 In all of the reasonable rate cases decided by the Su- 
 preme Court of the United States the investments were 
 permanent. 
 
 Steam railroads: (Reagan vs. Farmers Loan & Trust 
 Co., 154 U. 8., 362; Smyth vs. Ames, 169 U. 8., 466; Ex- 
 parte Young, 209 U. S., 123; Southern Ry. Co. vs. St. 
 Louis Hay & Grain Co., 214 U. 8., 297.) 
 
 Water and irrigation works: (San Diego Land <& Town 
 Co. vs. Jasper, 189 U. S., 439; Stanislaus County vs. San 
 Joaguin, etc. Co., 192 U. S., 201 ; Knoxrlllc rs Water Co., 
 212 U. 8,1) 
 
 Gas works: ( Wilco vs. Consolidated Gas Work*. 212 
 U. S., 578.)
 
 206 
 
 Permanent turnpike: (Covington. etc.,, Turnpike Co. 
 vs. Sandford, 164 V. 8., 578.) 
 
 Telephone system: (Home Telephone Co. vs. Los 
 Angeles, 211 U. 8., 265.) 
 
 In the Knoxville water works case, the court summar- 
 ized its leading prior decisions; and as it was not satis- 
 fied that the rates in question were confiscatory, dis- 
 missed the bill of the water company without prejudice 
 to the filing of a new bill if the rates proved to be in- 
 adequate. 
 
 The court in an opinion by Mr. Justice Moody, said : 
 
 "It cannot be doubted that in a clear case of confis- 
 cation it is the right and duty of the court to annul the 
 law. Thus in Reagan vs. Farmers' Loan & Trust Co., 154 
 U. 8., 362, where the property was worth more than its 
 capitalization, and upon the admitted facts the rates pre- 
 scribed would not pay one-half the interest on the bonded 
 debt; in Cov-ington etc. Turnpike Co. vs. Sanford, 164 U. 
 8., 578, where the rates prescribed would not even pay 
 operating expenses; in Smyth vs. Ames, 169 U. 8., 466, 
 where the rates prescribed left substantially nothing over 
 operating expenses and cost of service; and in Expartc 
 Young, supra, where, on the aspect of the case whicli 
 was before the court, it was not disputed that the rates 
 prescribed were in fact confiscatory, injunctions were 
 severally sustained. But the case before us is not a case 
 of this kind. Upon any aspect of the evidence the com- 
 pany is certain to obtain a substantial net revenue un- 
 der the operation of the ordinance. The net income, in 
 any event, would be substantially 6 per cent, or 4 per 
 cent after an allowance of 2 per cent for depreciation. 
 See Stanislaus County vs. Sam, Joaquin Co., 192 U. S. 201. 
 We cannot know clearlv that the revenue would not much
 
 207 
 
 exceed that return. We do not feel called upon to de- 
 termine whether a demonstrated reduction of income i<> 
 that point would or would not amount to confiscation. 
 Where the case rests, as it does here, not upon observa- 
 tion of the actual operation under the ordinance, but 
 upon speculation as to its effect, based upon the opera- 
 tions of a prior fiscal year, we will not guess whether the 
 substantial return certain to be earned would lack some- 
 thing of the return which would save the effect of the 
 ordinance from confiscation. It is enough that the whole 
 case leaves us in grave doubt. The valuation of the prop- 
 erty was an estimate and is greatly disputed. The ex- 
 pense account was not agreed upon. The ordinance had 
 not actually been put into operation ; the inferences were 
 based upon the operation of the preceding year; and the 
 conclusion of the court below rested upon that most un- 
 satisfactory evidence, the testimony of expert witnesses 
 employed by the parties. The city authorities acted in 
 good faith, and they tried, without success, to obtain 
 from the company a statement of its property, in capitali- 
 zation and earnings. 
 
 "The courts, in clear cases, ought not to hesitate to 
 arrest the operation of a confiscatory law, but they oii.uht 
 to refrain from interfering in cases of any other kind. 
 Regulation of public service corporations, which perform 
 their duties under conditions of necessary monopoly, 
 will occur with greater and greater frequency as time 
 goes on. It is a delicate and dangerous function, and 
 ought to be exercised with a keen sense of justice on the 
 part of the regulating body, met by a frank disclosure 
 on the part of the company to be regulated. The courts 
 ought not to bear the whole burden of saving property 
 from confiscation, though they will not be found wanting 
 where the proof is clear. The legislatures and subordi- 
 nate bodies, to whom the legislative power has been dele-
 
 208 
 
 gated, ought to do their part. Our social system rests 
 largely upon the sanctity of private property, and that 
 state or community which seeks to invade it wiH soon 
 discover the error in the disaster which follows. The 
 slight gain to the consumer, which he would obtain from 
 a reduction in the rates charged by public service corpo- 
 rations, is as nothing compared with his share in the ruin 
 which would be brought about by denying to private prop- 
 erty its just reward, thus unsettling values and destroy- 
 ing confidence. On the other hand, the companies to be 
 regulated, will find it to their lasting interest to furnish 
 freely the information upon which a just regulation can 
 be based. 
 
 "If hereafter it shall appear, under the actual opera- 
 tion of the ordinance, that the returns allowed by it oper- 
 ate as a confiscation of property, nothing in this judg- 
 ment will prevent another application to the courts of the 
 United States or to the courts of the State of Tennessee. 
 But as the case now stands there is no such certainty that 
 the rates prescribed will necessarily have the effect of 
 denying to the company such a return as would avoid 
 confiscation." 
 
 A careful reading of the opinions of the Supreme Court 
 of the United States in the foregoing reasonable rate 
 cases, and applying the rules laid down by the court, to 
 the case of the Detroit United Kailway, leads us to the 
 following conclusions. 
 
 (1) That a just and fair valuation must be placed 
 on the property of the company, not at its cost, but at 
 what it would now cost to reproduce it, less any actual 
 depreciation as it has annually occurred, and is likely 
 to occur in the future; but which depreciation must be 
 added to the operating expenses of the company. Any 
 unexpired street grants held by the company must be
 
 200 
 
 included in -the valuation; and a valuation must also be 
 placed upon the franchise to maintain and operate, as 
 that franchise has become permanently attached to the 
 physical property, which must be given the value it has 
 as a system of street railways to be maintained and oper- 
 ated, and not to be destroyed by removal from the streets, 
 or 'by inadequate rates of fare. 
 
 (2) That a net income of six per cent upon the value 
 of the property thus ascertained, would not be regarded 
 as confiscatory ; but in view of the net earnings in Detroit 
 and Michigan of investments in banking, manufacturing, 
 merchandizing, and newspaper publishing, judged on a 
 strict cash basis, ten per cent on the present cash value 
 of the property would not be excessive and would be al- 
 together just and reasonable. 
 
 The question of reasonable rates is primarily for the 
 authorities of the state, and the courts of the state. 
 Where the state law provides for a determination of the 
 question of reasonableness, by an executive board or com- 
 mission, and permits a review of its decisions by the 
 courts of the state with an appeal to the State Supreme 
 Court, the jurisdiction of the federal courts to restrain 
 the imposition of confiscatory rates should not be invoked 
 until resort has been had to the state tribunal and courts. 
 (Prentiss vs. Atlantic Coast Line, 211 U. S., 210.) 
 
 These decisions of the Supreme Court of the United 
 States in rate cases bring one feature of the federal juris- 
 diction in such cases into great prominence. 
 
 That jurisdiction can only be sucessfully invoked to 
 prevent actual confiscation, and in the consideration of 
 that question the federal courts are necessarily confined 
 to the property concerned as it is, and cannot have re- 
 gard for collateral matters which may properly be given
 
 210 
 
 consideration by the state or local authorities when they 
 determine a question of reasonable rates. 
 
 There is a great deal of difference between a public 
 service corporation which is doing business on compen- 
 sation which barely escapes from being conns-eatery, and 
 a like corporation earning a liberal conpensation. The 
 one must hold down the wages of its employes to the low- 
 est possible point; exercise the utmost economy in the 
 purchase of material and supplies, and in the erection 
 of its buildings and plant; render just as little and as 
 poor a service to the public as is permissible; and for- 
 bear to the limit from making extensions and improve- 
 ments. 
 
 On the other hand a corporation earning a fairly ade- 
 quate compensation, can pay good living wages to its em- 
 ployes; make extensions and improvements; and main- 
 tain a good, efficient and steadily improving service; and 
 be of great and continuous benefit to the community in 
 which it is located. 
 
 Nothing could be more detrimental to a growing and 
 progressive American city, than a street railway corpo- 
 ration constantly on the verge of bankruptcy. Old, out 
 of date and dirty cars; rough tracks and battered rails; 
 flattened wheels, and ill-clad and overworked employes, 
 are inevitable with a street railway company whose rates 
 of fare just escape from being denounced by the federal 
 judiciary. 
 
 State authorities in fixing, and local authorities in 
 agreeing to rates of fare, may well prefer to establish 
 rates, not on an extravagant, but on a wholesome basis, 
 such as would encourage the street railway company in 
 maintaining and justify the public in demanding and en- 
 forcing a service of $ie highest quality attainable. 
 
 In every growing city, where the population and busi-
 
 211 
 
 ness of the city and its suburbs is constantly increasing, 
 the demand for new street railways and extensions of old 
 lines, is incessant, and unless adequately remunerated 
 and permanently secured, private capital will not engage 
 in such undertakes; and public capital, managed by the 
 municipality, cannot be employed, except with the cer- 
 tainty that the service will not be as good and will be 
 more expensive to the public, than that of a private cor- 
 poration. 
 
 During the street railway agitation in Detroit there 
 has not, for about thirteen years, been any construction 
 of new lines or extensions within the city. Some exten- 
 sions and improvements have been made in the suburbs, 
 but these were made under grants from suburban town- 
 ships and villages and not under city grants. 
 
 A number of new lines, and a rearrangement of the 
 existing system, is now a prime necessity, and an ade- 
 quate terminal station for the interurban lines is of the 
 utmost importance to the business interests of the city, 
 Which have been so greatly promoted and advanced by 
 the interurban traffic and can be still further benefited 
 by an up to date service. 
 
 It is safe to say that ten millions of dollars should be 
 invested in permanent street railway improvements in 
 the immediate future. 
 
 Now, turn into the question of reasonable rates, as 
 good law, the contention that at the expiration of a 
 street grant the street railway company must submit to 
 the option of getting out of the streets, or of accepting 
 ruinous rates of fare, and does it not become perfectly 
 clear, that a street railway company must build up a 
 sinking fund equal to the then value of its property, less 
 only the value of that property as jugk removed from the 
 streets; or run the risk of being unable to pay its bonds
 
 212 
 
 and other indebtedness, and of making no return what- 
 ever to its stockholders. 
 
 How can any person of plain, ordinary understanding 
 seriously and in good faith contend that the street rail- 
 ways of Detroit have been in the past and should be in 
 the future, constructed and operated upon a legal theory 
 so utterly destructive to the actual investments therein, 
 and such a complete and absolute barrier to the low rates 
 of fare which have so far prevailed. 
 
 With such a theory established as the law in Michigan 
 it is a certainty that the Supreme Court of the United 
 States would hold enforced five cent fares to be confls- 
 catory and a deprivation of property without due process 
 of law. 
 
 The report of the Comptroller of the Currency for 
 1908, shows that the net earnings of the national banks 
 of the United States, on a cash capital of $893,932,010 
 were $131,335,288, or 14.69 per cent; and that the divi- 
 dends actually paid were $97,336,282, or 10.89 per cent. 
 
 State banks, reporting their dividends to the comp- 
 troller, paid in 1908, dividends of 10.19 per cent; loan 
 and trust companies paid 10.08 per cent; and private 
 banks paid 13.57 per cent, 
 
 It is well known that the net earnings of the national 
 and state banks and the trust companies of Detriot, ex- 
 ceed the above averages. 
 
 The stove companies in Detroit have paid more than 10 
 per cent for years, and in addition each company has 
 accumulated a large surplus, justifying stock dividends 
 in addition to the regular dividends. Other manufactur- 
 ing companies, and mercantile corporations, have been 
 equally successful. 
 
 No business enterprise in Detroit would be regarded
 
 213 
 
 as a success if it did not earn net, 10 per cent of the 
 capital actually invested. 
 
 The business which more nearly resembles that of a 
 public service corporation is the business of publishing a 
 newspaper. 
 
 It is similar to that of a telegraph or telephone com 
 pany, which transmits written or oral messages. A news- 
 paper corporation conveys, transmits and carries news, 
 advertisements and literary matter, including editorial 
 comments, propaganda and sermons, all of more or less 
 value to the general public. 
 
 In the absence of a statute making them such, tele- 
 graph and telephone companies are not in Michigan re- 
 garded as common carriers. (Birket vs. Telegraph Co., 
 103 Mich. 261.) 
 
 But the legislature can make them common carriers, 
 and it has enacted many provisions regulating them. 
 How would the owners of our newspapers like to have 
 their business subjected to the control of a state commis- 
 sion, with power to reduce their net earnings to 6 per 
 cent of the actual cash value of their physical property, 
 or the money actually invested. 
 
 They make great use of the railroads, telegraph and 
 telephone lines, and perform a public service of the same 
 general character. The street railways of Detroit have 
 been of as much benefit to our newspaper corporations 
 as they have been to any other interest in the community, 
 and there is quite as much need of regulating their 
 charges for advertisements, as there is need of regulating 
 the charges of other corporations engaged in serving the 
 public. 
 
 There are no published reports showing either the 
 gross or the net earnings of our newspapers, but they are 
 known to be very large. More than 100 per cent on the
 
 214 
 
 cash capital actually invested is not uncommon among 
 them. 
 
 Under the constitutional guaranties which prevail in 
 the United States, it is not competent for state legisla- 
 tures or congress to regulate prices for a purely private 
 business; but the line between that which is private, and 
 that which is public is not clearly drawn. Under mod- 
 ern conditions many things which have been heretofore 
 regarded as private, have been charged with a public in- 
 terest, warranting governmental interference. 
 
 The business of the Standard Oil Company may be 
 regarded as purely private, but its pipe lines have in 
 some of the states been declared common carriers, and the 
 Michigan statute, for the incorporation of pipe line com- 
 panies for the transportation of brine expressly makes 
 such companies common carriers. (2 C. L. 1897, Sec. 
 6497, subd. 7.) 
 
 It would be difficult to define the limits of the power of 
 our governments to fix prices; but it is certain that many 
 'things which have not yet been touched, are within that 
 power, and will be subjected to it when the public inter- 
 ests make it necessary. 
 
 It would be easy to extend the present limits of gov- 
 ernmental interference so as to include newspaper cor- 
 porations as common carriers of news, advertisements 
 and mental pabulum. 
 
 There should be no governmental regulation of private 
 enterprises except in the face of a supreme necessity, and 
 
 then the action of the government should be direct, firm 
 
 
 and decisive. 
 
 Our newspaper friends are safe for many years, but 
 that does not change the fact that the newspaper corpo- 
 rations of the present day, are but little if any different
 
 215 
 
 from such as are universally regarded as public service 
 corporations. 
 
 It may be urged that a newspaper is not a monopoly, 
 as anyone can enter into that business; but the truth 
 is a newspaper with an old established circulation has 
 the greatest kind of a monopoly; no one can disturb it; 
 it would take many millions of dollars to supplant the 
 Detroit Evening News or the Detroit Free Press, if it 
 could be done at all. Further than that our leading 
 newspapers have press associations which are openly and 
 avowedly maintained as monopolies. 
 
 Where a street railway company is under the risk of 
 having its property destroyed by being compelled to re- 
 move from the streets or to accept inadequate rates of 
 fare, it is certainly entitled to deduct from its net earn- 
 ings over and 'above operating expenses, a sufficient an- 
 nual percentage to build up a sinking fund to restore 
 the investment in its capital stock and to pay its bonded 
 and other indebtedness in full. 
 
 The courts of Ontario, and the learned judges of the 
 privy council in England have had occasion to consider 
 a similar case. (International Bridge Company vs. Can- 
 ada Southern R. R. Co., 8 Ont . App. 226 ; S. C. 8 Appeal 
 Cases, 723.) 
 
 In that case the tolls of the bridge company were at- 
 tacked 'by the railroad company as unreasonable, and it 
 appeared that the net earnings were as much as 15 per 
 cent 
 
 But it further appeared that the bridge was liable to bo 
 swept away or destroyed, in whole or in part, as the Tay 
 bridge was, and it was held that the bridge company was 
 entitled to build up a sinking fund. The Ontario court 
 said 
 
 "To speak of six per cent upon capital laid out in 
 such an enterprise, is most unreasonable."
 
 216 
 
 Seasonable rate cases in the United States have only 
 concerned permanent investments and the question of 
 building up a sinking fund to preserve the investment, 
 has not been presented; but it has been mentioned in two 
 cases in Pennsylvania, one of which concerned the plant of 
 a water company, and the other a steam railroad. (Bry- 
 mer vs. Butler Water Co., 179 Pa. St., 231 ; Penna. R. R. 
 Co. vs. Phila. County, 220 Pa., 100.) 
 
 In the case of the Pennsylvania Railroad company it 
 appeared that the company had $53,600,598.74 invested 
 in its intrastate passenger business, of which $21,051,- 
 795.96 represented mortgage or otherwise funded indebt- 
 edness, giving rise to an annual interest charge of $894,- 
 701.33; and $32,548,802.74 represented the amount of 
 money contributed by the stockholders, plus the amount 
 set aside from surplus earnings in past years. 
 
 The Pennsylvania, Railroad Company was incorporated 
 in 1846, and under the rates of fare it was charging, the 
 stockholders investment of $32,548,802.78 was earning 5.1 
 per cent. 
 
 The legislature passed an act reducing its rates of fare 
 to two cents per mile, which it was found would reduce 
 the earnigs of the stockholders to 1.94 per cent. 
 
 Held that the act of the legislature was confiscatory 
 and unconstitutional. 
 
 At pages 114, 115, the court said : 
 
 "The court below conceded the general rule and held 
 that "any attempt by the legislature at the regulation of 
 charges is presumptively reasonable. The burden of dem- 
 onstrating the unreasonableness lies on him who objects 
 to the regulation enacted." And further: "Public service 
 corporations in Pennsylvania are entitled to look for a 
 rate of return, if their property will earn it, not less 
 than the legal rate of interest, and a system of charges
 
 217 
 
 that yields no more income than is fairly requisite to 
 maintain the plant, pay fixed charges and operating ex- 
 penses, provide a suitable sinking fund for the payment 
 of debts and pay a fair profit to the owners of the prop- 
 erty cannot be said to be unreasonable. Brymer vs. But- 
 ler Water Co., 179 Pa., 231." In so holding the court 
 committed no error of which the appellant can complain. 
 The presumption in favor of the prescribed rate is no 
 more than the ordinary presumption in favor of the con- 
 stitutionality of the acts of assembly. It has no special 
 strength or sanctity, and in view of the public history of 
 the passage of the act of 1907 without investigation and 
 in obedience to a popular agitation for the same rate not 
 only in Pennsylvania but over the whole country, it might 
 be said that very slight evidence would rebut the pre- 
 sumption in this case. 
 
 "What was said in Brymer vs. Water Co., 179 Pa., 
 231, was that the company was entitled to a fair return, 
 not less than the legal rate of interest. In naming the 
 legal rate the court was naming a minimum, not maxi- 
 mum, rate. Six per cent is the legal estimate of the legit- 
 imate profit from the ordinary safe use of money. No 
 business man in 1846, even if now, went into a new and 
 extensive venture of uncertain outcome without the hope 
 of more than common interest. Because his judgment 01* 
 foresight was good is no reason that he should be shorn 
 of his profits in the result. What is a fair profit is a com- 
 plicated and difficult question, but there are certain ele- 
 ments that are plainly to be regarded to avoid injustice, 
 such as the original investment, the risks assumed at that 
 time, the returns as compared with other enterprises as 
 nearly similar as may be, the cost of maintenance and 
 improvement, the prospects of increase and the present 
 value in view of the preceding elements. Injustice is 
 done by anything that fails to consider these, and to deal 
 equitably with the private as well as the public interests
 
 218 
 
 involved. It is not necessarily regulated by what others 
 would now make the venture for, under the present cir- 
 cumstances and with present knowledge. The public hav- 
 ing long reaped the incidental profits from the develop- 
 ment of the country by the enterprise and venture of cap- 
 ital, in the increased value of land, the opening of new 
 and wider markets for crops and manufactures and the 
 facility of intercourse and exchange for persons and 
 property, the courts should not now ignore this aspect 
 of the subject in considering the question of injustice to 
 the corporators. In view of the evidence before the court 
 and the proper elements with which it must be considered 
 the court below certainly did not err against the appel- 
 lant in finding that the statutory rates of fare would do 
 injustice to the corporators." 
 
 The sinking fund recognized by the Pennsylvania court 
 was for the purpose of building up a fund to pay the 
 bonded debt of the company, but any reduction in that 
 debt would be a reduction of the capital invested and 
 cause a corresponding decrease in the annual charges for 
 interest. 
 
 That kind of a sinking fund is one of prudence to en- 
 able the company to pay its bonded indebtedness or some 
 portion of it at maturity, in case of any difficulty in mak- 
 ing a renewal of the loan. It is not a sinking fund to 
 protect the property from destruction, by dismantling it 
 or by inadequate rates of fare forced upon the company. 
 
 The Detroit United Railway, has a capital investment 
 of |25,000,000 equally divided into a stock issue and a 
 bonded indebtedness of $12,500,000 each. If the company, 
 whenever its local contracts fixing rates of fare have ex- 
 pired, and it is operating its street railways without any 
 such contract, is subject to adverse municipal action com- 
 pelling it to remove from the streets or to charge ruinous
 
 219 
 
 rates of fare, it is entitled, on any view that can be taken 
 of the risk, to set a part for the purposes of a sinking fund, 
 as much as $1,000,000 a year; and any additions to the 
 cash capital invested should be safeguarded in the same 
 way. 
 
 The Cleveland street railway ordinance of December 
 18, 1909, guards against any such destruction of the prop- 
 erty, and in that connection provides for a sinking fund. 
 The city reserves the right to purchase the property 
 at its capital value, plus ten per cent; it also reserves 
 the right after January 1, 1918, to designate a purchaser 
 of the property, on the same terms; and if the grant ex- 
 pires and is not renewed, and the city makes a grant to 
 another company, that company is required to purchase 
 the property on the same terms as the city might have 
 purchased it. 
 
 When the grant has less than fifteen years to run the 
 company is authorized to charge the maximum rates of 
 fare, of four cents cash fare, seven tickets for twenty-five 
 cents, and one cent transfer, no rebate; and the surplus 
 earnings are to be applied (1) to the payment of floating 
 indebtedness; (2) the payment of any outstanding bonds 
 which can be paid, and (3) by creating a sinking fund 
 to assist in securing a reduction of capital value, in case 
 the city or its licensee or grantee should purchase the 
 property. 
 
 The Cleveland ordinance is wisely designed to prevent 
 the city from exercising at the expiration of the grant, 
 that arbitrary and confiscatory power, it is supposed to 
 possess under the laws of Ohio. It is a better construc- 
 tion of those laws than that of the state and federal 
 courts in the case of the Inclined Plane Railroad Com 
 pany, and it is to the credit of Mayor Tom L. Johnson 
 that he wound up his administration by consenting to and 
 approving it.
 
 220 
 
 The law, like everything else, is evolutionary in its 
 nature. At times it may be a laggard, but eventually it 
 reaches the truth and justice. 
 
 The Cleveland ordinance is a practical precedent of in- 
 estimable value to the people of Ohio; but it has one fea- 
 ture of great danger to the street railway company. 
 
 It is more than likely that under the provisions of the 
 ordinance for an automatic adjustment from time to time 
 of the rates of fare, the maximum rates will be reached 
 before the first ten years of the twenty-five year grant 
 has expired, and that they will not be sufficient to main- 
 tain such a street railway service as the city is entitled 
 to have and demand. The company is bound by its con- 
 tract, and it may become financially embarrassed long be- 
 fore the property is purchased by the city, its licensee or 
 grantee, to the great injury and loss of its stockholders. 
 
 In the presidential campaign of 1896 I had occasion to 
 publish a series of tables designed to show the extent to 
 which the relative shortage for a number of years in the 
 worlds' production of gold, had enhanced the value or 
 purchasing power of that metal and made a corresponding 
 reduction in the prices of all the staple crops of American 
 farms. 
 
 I made my comparison with a table of the prices of 22 
 farm products prevailing in Chicago July 1, 1874, and a 
 similar table of the prices in Chicago July 1, 189-6, and 
 found that gold had appreciated about 105 per cent. 
 
 July 1, 1901, I published a table of prices then prevail- 
 ing and it showed that the purchasing power of gold had 
 receded so that it was only 26 1-2 per cent greater than 
 it was in 1874. In that connection I said : 
 
 "The annual production of gold is now more than $300,- 
 000,000 with the prospect that each succeeding year will 
 see a substantial increase, and in nrr judgment it indi-
 
 221 
 
 cates that we are at the threshold of the greatest era of 
 prosperity the world has ever seen." 
 
 As a matter of fact the annual production of gold has 
 steadily increased, and in 1909 it reached the enormous 
 sum of $450,000,000 with every indication that by 1912 
 it will be $500,000,000. 
 
 As gold is practically imperishable, only a small por- 
 tion of it, being actually consumed, destroyed or lost, the 
 production each year increases the worlds' stock of that 
 metal which greatly decreases its value or purchasing 
 power; and it will continue to do so, as long as the quan- 
 titative theory of money, and the law of supply and de- 
 mand rule the economic world, and the increased produc- 
 tion of gold continues. I am not a prophet or the son 
 of a prophet, but I now predict that we are only on the 
 eve of higher prices. There does not appear to be any 
 way of stopping it. The exertable power of all the gov- 
 ernments in the world is not equal to the exigencies of 
 the situation. 
 
 During the second administration of President Cleve- 
 land, bonds were issued under the obsolete resumption 
 act, to keep a reserve fund in the treasury of $50,000,000, 
 and now there is over $1,000,000,000 in the vaults, the 
 greater part of which is in circulation in the form of gold 
 certificates or yellow backs. 
 
 The best evidence of the effect on prices of the in- 
 creased production of gold will be found in the third of 
 the tables set forth in the appendix. It shows that since 
 1896 gold has depreciated in value over 50 per cent, mus- 
 ing a rise of prices of 100 per cent. 
 
 There is only one restraining influence. Inflation feeds 
 on itself; it produces great business and productive ac- 
 tivity, which over-leaps itself, and a set back becomes in-
 
 222 
 
 evi table. Such was the financial depression of 1907. The 
 peculiar thing about that "panic," was that it had but 
 little effect on the general business of the country, and 
 did not produce a general fall in prices; indeed, some of 
 the more staple productions, actually increased in prices. 
 
 It is proposed to remedy the alleged evil of such set- 
 backs by authorizing an emergency currency, which, how- 
 ever, is more likely to prove a permanent inflation rather 
 than a temporary one. 
 
 If a greater volume of circulating medium is necessary, 
 gold can be purchased in the markets of the world., de- 
 posited in the treasury and gold certificates obtained for 
 it. That is the only kind of inflation needed, and it would 
 have a restraining influence on the increase in prices; not- 
 enough, however, to prevent a gradual rise, as long as the 
 deluge of gold continues. 
 
 Like all other employes, those of a street railway must 
 have wages sufficient to feed, clothe and shelter them; 
 and this element in the operation of street railways may 
 have a very serious effect on their finances in the near 
 future, accompanied as it will be, by an equal rise in the 
 prices of all material and supplies entering into construc- 
 tion, maintenance and repairs. 
 
 Whatever merit the agitation for three-cent fares may 
 have possessed in the nineties has been absolutely oblit- 
 erated; and. the end of the upward tendency in prices is 
 not yet in sight. 
 
 The Cleveland street railway ordinance was borrowed 
 in part from the laws of Indiana. 
 
 The Supreme 'Court of the United States in deciding 
 the Indianapolis street railway case, (166 U. S., 557), 
 having declined to express an opinion on the question 
 whether the local grant extended beyond the designated
 
 223 
 
 term of thirty-seven years, that question remained unset- 
 tled until it was disposed of by the state legislature. 
 
 At the next ensuing session of the legislature, an act, 
 approved March 5, 1897, provided that in any city having 
 a population of more than 100,000 inhabitants, the local 
 grants should expire at the time designated, and the right 
 of the grantee to remain in the streets should cease; but 
 it was further provided that at or before the expiration 
 of the contract period, the city should open to free com- 
 petition the further occupancy of the streets for thirty 
 years, and if the occupying company was not the success- 
 ful competitor, the new or other company, which was suc- 
 cessful, could not take possession of the streets, until it 
 had condemned the street railway property of the old 
 company to the public use and had paid to the old com- 
 pany the appraised value of its. property as ascertained 
 in the condemnation proceedings. (Laws of Ind. 1897, p. 
 154.) 
 
 Another act, approved March 6, 1897, fixed the rate of 
 fare at three cents, with a right to a transfer. (Id.. />. 
 201). 
 
 The three-cent fare law was attacked in the state courts, 
 not on the ground that the rate was inadequate, but on 
 the ground that the legislature had no power to impair 
 the terms of local grants which had not expired. The state 
 Supreme Court held the act valid as within the power 
 to amend or repeal. (City of Indianapolis vs. Navin, 151 
 Ind., 139.) 
 
 The United States Circuit Court held the act invalid 
 on another ground, not agreeing thereon, with the state 
 court. (Central Trust Co. vs. Citizens Street R. Co., 80 
 Fed., 218.) 
 
 An appeal to the United States Circuit of Appeals was 
 dismissed on the jurisdictional ground that the question
 
 224 
 
 of impairment of contract should have been appealed to 
 the Supreme Court of the United States. (City of In- 
 dianapolis vs. Central Trust Co., 83 Fed., 529.) 
 
 The state legislature again intervened and passed the 
 act of March 3, 1899, which fixes the rates of fare at five 
 cents for a single cash fare, with transfer; six tickets for 
 twenty-five cents; and twenty-five tickets for one dollar, 
 with transfers. 
 
 The city is given the right to purchase the property 
 at any time within two years and not later than one year, 
 before the expiration of the local contract, and if the 
 city and company are unable to agree on the value of the 
 property, the city may institute condemnation proceedings 
 to fix the value. 
 
 If the local grant expires, and a renewal has not been 
 granted, and a new or other company, on free and open 
 competition, is the successful bidder, it must condemn 
 and pay for the property of the occupying company as 
 under the act of 1897. (Laws of Ind., 1899, p. 260.) 
 
 The above act is still in force. (2 Burns' Anno. In- 
 diana Statutes, 1908, Sec. 5648-5657, see sec. 5665.) 
 
 It has been sustained as constitutional. (Smith vs In- 
 dianapolis Street Railway Co., 158 Ind., 425.)
 
 225 
 
 XIII. 
 
 "No more public service franchises on any terms, 
 and the termination of all existing grants at the 
 earliest possible date. 
 
 "Government by the people, and not by private 
 corporations." 
 
 One of the leading newspapers of Detroit has had the 
 above motto or legend at the head of its editorial columns 
 for a long time. I want to express my entire approval 
 of it, and endorsement of every idea or sentiment con- 
 tained in it; but perhaps not quite in the same sense it is 
 understood by the authors of it, or by some who have 
 read it 
 
 Government by the people, does not in this country 
 mean the mere unrestrained will of the people. The peo- 
 ple themselves have adopted a constitution, which divides 
 the government into three branches or principal depart- 
 ments, the legislative, executive and judicative. The judi- 
 cial is as much a part of government by the people as the 
 legislative or executive. In addition to this division of 
 the powers of government the people in their constitution 
 have placed certain restrictions on all the departments, 
 and on themselves, among others, that no person shall 
 be deprived of his life, liberty or property without due 
 process of law, and they have made it the particular duty 
 of the judiciary to see that this restriction is observed and 
 enforced. 
 
 This is government by the people as it exists in the 
 United States. It is not government by the mere will or 
 caprice of majorities, but by sound, sensible and imper-
 
 226 
 
 ative law. It is not government by editorial opinion, or 
 by temporary outbursts of popular feeling. 
 
 In its true meaning the government by the people clause 
 of the motto of the Evening News is absolutely correct. 
 The public- service franchises mentioned are contracts fix- 
 ing for a long or short period the rates of fare or prices 
 to be charged by the grantee. These contracts, if they 
 are for any considerable length of time, are objectionable, 
 because they may become very burdensome to one or the 
 other of the parties, without any possible chance for re- 
 lief. The Supreme Court of the United States has re- 
 cently npheld a contract of the City of Minneapolis for 
 fifty-years. (Advance Sheets, Feb. 1, 1910, p. 118.) 
 
 It is good advice to give to municipalities and to pub- 
 lic service corporations, do not make any long-time con- 
 tracts, but leave the rates of fare, or prices, to be deter- 
 mined from time to time, on common law principles, as 
 changes in economic conditions, in the one direction or 
 the other, actually occur. That is the only safe, sound 
 and just way of handling so troublesome a question. 
 
 The Supreme Court of the United States has always 
 been very careful not to make any permanent decrees in 
 rate cases, but has invariably left it open to either of the 
 parties, to make a new application to the trial court in 
 case the rates sustained by the court prove to be inade- 
 quate or excessive. 
 
 What could be more in harmony with the American 
 regard for fair play and equal and exact justice? 
 
 Some of the street grants of the Detroit United Rail- 
 way have expired, and others will expire. Is it good sense 
 on the part of the city or the company to continue the 
 policy of making long time contracts, to become, in course
 
 227 
 
 of time, subjects of dissatisfaction and controversy? The 
 automatic adjustment of fares provided for in the Cleve- 
 land street railway ordinance will become a matter of 
 legal controversy to be settled by Judge Tayler or some 
 other good judge, and it would have been better to have 
 left the question of reasonable fares wide open, for judi- 
 cial action whenever there is any occasion to revise the 
 rates. 
 
 This is no idle dream ; it is plain 'and simple common 
 sense; and the Evening News is right when it says, "No 
 more public service franchises." 
 
 If its learned and accomplished editors, or any other 
 citizens, or the city itself, are of the opinion that the 
 rates of fare now (being charged by the Detroit United 
 Railway are excessive, the courts are open to them, with 
 a certainty that they will be given a full and fair hearing, 
 and as just a decision as is attainable by any known 
 means of adjusting matters of dispute and controversy. 
 The decisions of the courts are far from being always 
 right, but the judiciary is the result of many centuries 
 of human experience, and the tendency among all the 
 more civilized nations is to settle their disagreements by 
 arbitration. Eventually there will be a great international 
 court, which will exist and have jurisdiction for that very 
 purpose.
 
 228 
 
 XIV. 
 
 One of the great merits of requiring or permitting 
 street railway corporations to maintain and operate 
 their railways subject only to the legal obligation to 
 charge reasonable fares, is, that it does away with 
 the real and pretended reasons for municipal owner- 
 ship. 
 
 The ownership and operation of street railways by 
 municipalities can have but one or both of two objects: 
 (1) To secure the same service a private corporation 
 would render for less cost to the public; or (2) to secure 
 a better service for the same cost. 
 
 The best service attainable at the lowest possible cost 
 is the thing that is desired, and is much more desirable 
 than a poorer service at less cost. At the inception of a 
 street railway enterprise, a long time contract may be 
 advisable to enable the grantee to apply its surplus 
 earnings to extending and building up a street railwav 
 system. Such was the history of the old Detroit City 
 Eailway under its thirty year contracts. The city and 
 the public got the service wanted, which was the consider- 
 ation for the grants, and made them inviolable contracts. 
 
 When the Detroit United Railway acquired the prop- 
 erty it got the tail-end of a number of the grants, among 
 them those on four of the most important streets in the 
 city, Jefferson, Woodward, Gratiot and Michigan, but it 
 continued the policy of maintaining and improving the 
 property and not allowing it to deteriorate in efficiency 
 or value.
 
 229 
 
 Now, that these grants have expired, and the property 
 is in good working condition, and only needs to be fur- 
 ther improved, and a few new lines and extensions built, 
 here and there, a contract for any considerable length of 
 time, would, as a business proposition, be ridiculous, for 
 it would more than likely prove injurious and burdensome 
 to one or the other of the parties, before the contract 
 period expired. The longer the contract period, the more 
 likely it is, that a serious change in economic and other 
 conditions will occur. 
 
 All the sentiment there is in United States in favor of 
 municipal ownership has been created by these long-time 
 contracts. The greater portion of those who believe in 
 municipal ownership, think it is the only way to get rid 
 of such contracts. A contract for twenty-four months 
 is to be preferred to one for twenty-four years, but what 
 is better yet is no contracts whatever fixing rates of fare. 
 
 The private ownership and operation of street railways 
 on such a plan has great advantages over municipal own- 
 ership. 
 
 (1) It would enable the public to have the benefit of 
 private management and control, which is universally 
 more economical and efficient than that of public officials. 
 The public would also have the benefit of private enter- 
 prise in making betterments and improvements in tracks, 
 power plants, and equipment. In short the public would 
 get the benefit of the best service for the least cost. 
 
 (2) Whenever the privately owned company was earn- 
 ing too much money the rates of fare could be reduced, 
 and when it was not earning enough to keep up with the 
 advance in improved means and facilities for rendering 
 the most efficient service, the rates could be increased. 
 
 (3) Street railway wars and controversies would be 
 eliminated from municipal politics, whereas municipal-
 
 230 
 
 ized street railways would be a subject of interminable 
 controversy in the conduct of municipal affairs. Take 
 the one matter of new lines and extensions, with the pub- 
 lic treasury open for their realization. How could an or- 
 dinary common council be held in sufficient restraint, and 
 how many real estate speculations would be exploited in 
 the outlying wards and nearby territory. Here is where 
 the restraints resting on private enterprise and private 
 capital would be particularly valuable. 
 
 (4) Under the manhood suffrage which prevails in 
 the United States, the electors in a city would be divided 
 in tw r o classes with opposing interests. The taxpayers of 
 the city would desire high rates of fare to enable a por- 
 tion of the net earnings of the street railways to be paid 
 into the city treasury for their relief; and the non-tax- 
 payers, or rather those who only pay taxes indirectly and 
 hardly realize that they are taxpayers, would demand 
 the lowest rates of fare, regardless of the needs of the 
 public treasury. 
 
 (5) Who and by what means could any abuses involv- 
 ing the rates of fare fixed by a municipality be corrected 
 or remedied. 
 
 Every monopoly has some disadvantages, but would not 
 a monopoly owned and operated by a public corporation 
 be a great deal more obnoxious than a private one subject 
 to the judicial control (for which I contend), of its rates 
 of fare. 
 
 (6) A municipality owning and operating a street 
 railway system, would be in possession of a perpetual 
 franchise with the power to charge whatever rates of fare 
 it pleased, and that power would certainly be abused in 
 the one direction or the other. The rates would be less 
 than they ought to be or higher, and the general public 
 would suffer either from an inadequate service, or exces- 
 sive rates of fare.
 
 231 
 
 (7) The restricted area or the unrestricted area of 
 territory to be served by a municipal street railway sys- 
 tem would be detrimental to the public interests. 
 
 The Detroit United Railway owns and controls directly 
 or indirectly eight suburban lines. They extend to Tren- 
 ton, Toledo, Jackson, Northville, Pontiac, Flint, Port 
 Huron and Mt. Clemens. These lines and the lines in the 
 city of Detroit are operated as one great system, with the 
 resulting economies, and advantages, incident to such 
 relations. The present statute authorizing municipal 
 ownership restricts such ownership to an area, not more 
 than five miles from the territorial boundaries of the 
 municipality, which means that the street railway system 
 of the Detroit United Railway would have to be severed, 
 with the certainty that the city in acquiring the urban 
 property must pay the damage done to the suburban lines, 
 and that neither the municipal system or the interurban 
 system can be operated as economically or as satisfac- 
 torily as when operated as one system. 
 
 If the five-mile restriction is removed the municipality 
 could acquire the whole property and the city of Detroit 
 by its common council and its public officials, would come 
 into the control of one of the largest street railway sys- 
 tems in the country. Bond issues to improve or extend 
 the lines would have to be authorized by the common 
 council, and the management of the property would be 
 subject to all the delays, annoyances and controversies 
 incident to municipal government in the United States. 
 
 With time contracts fixing rates of fare eliminated from 
 the subject, municipal ownership is a wild and chaotic 
 dream. 
 
 The postal service of the United States is frequently 
 referred to as a sample of governmental ownership, but
 
 232 
 
 the greater part of that service is performed by privately 
 owned railroads. The postal service is good because pri- 
 vate enterprise has enabled it to distribute the mails all 
 over the country with the greatest possible speed. 
 
 It must also be remembered that the postal department 
 has an annual deficit of many millions of dollars.
 
 233 
 
 XV. 
 
 The Supreme Court of the United States has 
 authoritatively established the doctrine that the rea- 
 sonableness of a given rate of fare or freight of a 
 public service corporation, is a judicial question, and 
 that any legislative or executive action, anywhere in 
 the United States or in any territory subject to their 
 jurisdiction, purporting to conclusively fix rates or 
 charges, without permitting a determination of the 
 question by the judiciary, after a full hearing, is a 
 deprivation of property without due process of law, 
 and unconstitutional and void. 
 
 Cannot bring my arguments and observations to a close 
 in any better way than to call the attention of my read- 
 ers to an evolution that has already taken place in the 
 law on the relation of the judiciary to the question of the 
 reasonableness of the rates of fare or charges of public 
 service corporations. 
 
 In the famous case of Mnnn vs. Illinois, 94 U. 8. 113 
 the Supreme Court of the United States held that it was 
 competent for the legislature of Illinois to fix the maxi- 
 mum charges for the storage of grain in warehouses in 
 Chicago and other places in the state, and if the legisla- 
 ture abused its power, the remedy must be a resort to the 
 polls and not to the courts. This doctrine was applied 
 and enforced in the railroad cases decided at the saim- 
 time. In one of them the court said : 
 
 "As to the claim that the courts must decide what is 
 reasonable^ and not the legislature. This is not new to 
 this case. It has been fully considered in Munn vs. People
 
 234 
 
 of Illinois. Where property has been clothed with a pub- 
 lic interest, the legislature may fix a limit to that which 
 shall in law be reasonable for its use. This limit binds 
 the courts as well as the people. If it has been improp- 
 erly fixed, the legislature, not the courts, must be appealed 
 to for the change." 
 
 That doctrine was completely overturned by the subse- 
 quent decisions of the court I will only refer to one of 
 them (Smyth vs. Ames, 169 U. S. 466 )_, in which the court 
 in an opinion by Justice Harlan reviewed the prior cases 
 and then said: 
 
 "In view of the adjudications these principles must be 
 regarded as settled: 
 
 "1. A railroad corporation is a person within the 
 meaning of the fourteenth amendment declaring that no 
 state shall deprive any person of property without due 
 process of law, nor deny to any person within its jurisdic- 
 tion the equal protection of the laws. 
 
 "2. A state enactment, or regulations made under the 
 authority of a state enactment, establishing rates for the 
 transportation of persons or property by railroad that 
 will not admit of the carrier earning such compensation 
 as under all the circumstances is just to it and to the pub- 
 lic, would deprive such carrier of its property without due 
 process of law and deny to it the equal protection of the 
 laws, and would therefore be repugnant to the fourteenth 
 amendment of the constitution of the United States. 
 
 "3. While rates for the transportation of persons and 
 property within the limits of a state are primarily for its 
 determination, the question whether they are so unreason- 
 ably low as to deprive the carrier of its property without 
 such compensation as the constitution secures, and there- 
 fore without due process of law, cannot be so conclusively 
 determined by the legislature of the state or by regula-
 
 235 
 
 tions adopted under its authority, that the matter may 
 not become the subject of judicial inquiry." 
 
 In that case the railroad rates fixed by a Nebraska 
 statute were found to be unreasonable and confiscatory, 
 and their enforcement was enjoined, with leave on the 
 part of the state, if conditions changed, to open the de- 
 cree. 
 
 The state legislature cannot impose unreasonable rates 
 upon the Detroit United Railway or any other street rail- 
 way company, and it cannot be done by the common 
 council of the city of Detroit under any authority that 
 has been or can be conferred upon it by the legislature. 
 
 At the common law the question whether the rates or 
 charges of a common carrier were reasonable was neces- 
 sarily a judicial question to be determined by appropriate 
 litigation between the carrier and its patrons. 
 
 Legislative interference in the United States has never 
 been anything more than advisory. The state legislatures 
 as to intrastate carriers, and the congress as to interstate 
 carriers, can by duly enacted statutes, declare what in 
 their judgment are reasonable rates ; but as we have seen, 
 their action is not conclusive, and it may be reviewed by 
 the courts. The legislative declaration, usually made 
 without investigation, is merely preliminary to a full and 
 complete investigation by a court of competent jurisdic- 
 tion. 
 
 That fixing rates of fare is not an exercise of the legis- 
 lative power is shown by the rulings of a number of state 
 Supreme Courts, that the power to fix reasonable rates 
 may be vested in executive boards or commissions. It is n 
 fundamental principle of American constitutional law 
 that legislative power cannot be delegated; it cannot be 
 exercised except with the consent and approval of a legis-
 
 236 
 
 lative body directly and immediately elected by the peo- 
 ple; and the representatives so chosen, cannot delegate 
 their authority, which limitation arises from the nature 
 of the power, and the division of the government into 
 three co-ordinate branches. 
 
 In the Minnesota railroad cases, 134 U. S. 418, 467, a 
 state statute allowing a railroad commission to establish 
 rates, which were to be conclusive and final, was declared 
 a violation of the constitution of the United States. 
 
 Among other things the court said: 
 
 "The question of the reasonableness of a rate of charge 
 for transportation by a railroad company, involving as it 
 does the element of reasonableness both as regards the 
 company and as regards the public, is eminently a ques- 
 tion for judicial investigation, requiring due process of 
 law for its determination. If the company is deprived of 
 the power of charging reasonable rates for the use of its 
 property, and such deprivation takes place in the absence 
 of an investigation by judicial machinery, it is deprived 
 of the lawful use of its property, and thus, in substance 
 and effect, of the property itself, without due process of 
 law and in violation of the constitution of the United 
 States; and in so far as it is thus deprived, while other 
 persons are permitted to receive reasonable profits upon 
 their invested capital, the company is deprived of the rea- 
 sonable protection of the laws." 
 
 With this high authority in support of the arguments 
 set forth in the foregoing pages, I respectfully submit 
 that the question now pending between the common coun- 
 cil of the city of Detroit and the Detroit United Railway, 
 concerning rates of fare, can only be authoritatively de- 
 termined by a court of equity, and that it ought to be so 
 determined, and no new contract fixing the rates of fare,
 
 237 
 
 should be discussed, considered, or entered into, on any 
 pretext whatever. 
 
 "But truth shall conquer at the last; 
 
 For round and round we run, 
 And ever the right comes uppermost, 
 
 And ever is justice done."
 
 239 
 
 APPENDIXES. 
 No. 1. 
 
 INDIANA STATUTE FIXING RATES OF FARE AND CONSERV- 
 ING STREET RAILWAYS AS PERMANENT PUBLIC IMPROVE- 
 MENTS AND PERPETUAL INVESTMENTS. 
 
 "An Act concerning street railroad companies in 
 cities, the population of which exceeds one hundred thou- 
 sand, repealing all laws in conflict with this act, and de- 
 claring an emergency. 
 
 (March 3, 1899.) 
 
 Section 1. Be it enacted by the General Assembly of 
 the State of Indiana, that it shall and may be lawful for 
 any street railroad company now or hereafter organized 
 under the laws of the State of Indiana for the purpose 
 of operating a street railroad in any city the population 
 of which by the federal census immediately preceding the 
 incorporation of such railroad company exceeds one 
 hundred thousand persons, and for such city to enter 
 into a contract defining the terms upon which such rail- 
 road company shall exercise its franchise within such 
 city, subject to all the provisions of this act. 
 
 Sec. 2. In any such contract shall be specified the 
 term, not exceeding thirty-four years from the taking 
 effect of the contract, during which the franchise of such 
 corporation shall continue; the rate of fare to be charged, 
 which shall be for a single cash fare not more than five 
 cents for each passenger over the age of five years, with 
 provisions in the contract securing the right of transfer
 
 240 
 
 for such cash fare to and over any other line of said 
 company, and that six tickets, entitling the holder to 
 passage and such transfer, shall be sold for not to exceed 
 twenty-five cents, and that twenty-five of such tickets 
 with like transfers, shall be sold for not to exceed one 
 dollar, and said contract shall provide that such tickets 
 shall toe kept for sale on all cars when the same are 
 carrying passengers, and all such tickets shall be received 
 as fare from any passenger presenting the same. The 
 ordinance granting such franchise and approving such 
 contract shall specify the method or methods of propul- 
 sion that shall or may be used under such contract, pro- 
 viding that such ordinance and contract shall reserve 
 to such city the right to require that such methods of 
 propulsion shall at any time be introduced as will insure 
 first-class and efficient service; and shall state the con- 
 sideration to be received by said city. Said ordinance 
 shall provide further, that the company making such con- 
 tract shall be required to pave the space occupied by and 
 between its tracks, and for a space of eighteen inches on 
 the outside thereof by the board of public works, and to 
 keep the same in repair; said paving and repairing to be 
 done under specifications, both as to material and manner, 
 as provided by the board of public works, and under the 
 supervision of the city engineer, and shall further provide 
 that, at all times during the period of such franchise, 
 said city may require such seasonable extensions of the 
 lines of said company or the construction of such new 
 lines as may be necessary for the efficient operation of 
 such railway and for the convenience of the public, and 
 shall provide further that said company shall not extend 
 any of its lines or enter upon any new streets in said city 
 without the consent of the common council of said city 
 first had and obtained, and in making such contract 
 said city shall reserve to itself the right to at all times
 
 241 
 
 exercise such reasonable control over such company and 
 the operation, maintenance and construction of its lines 
 as will secure efficient and first-class service. And such 
 ordinance and contract may contain such other terms, 
 conditions or requirements, not inconsistent with the pro- 
 visions of this act, as may be agreed upon between the 
 parties, or may be necessary to make effectual all the terms 
 of the contract. As a part of any contract entered into 
 pursuant to the provisions of this act, and as a part of the 
 consideration therefor the company entering into said con- 
 tract shall first make an absolute surrender to such city of 
 all franchises and rights to the use and occupancy of the 
 streets, alleys and public places of such city owned, held, 
 or claimed by such company within the corporate limits 
 of such city at the time of the making of such contract 
 pursuant to the provisions of this act, or theretofore 
 owned, held or claimed by such company. Any city en- 
 tering into any contract with any company under the 
 provisions of this act for the use and occupancy of the 
 streets, alleys and public places in such city for street 
 railroad purposes may at any time within two years 
 and not later than one year before the expiration of said 
 contract, purchase of such company its property of every 
 description whatsoever, and if any such city and com- 
 pany shall be unable to agree upon the terms of such pur- 
 chase, then such city may file its complaint or petition 
 in the circuit court of the county in which such city is 
 situated for a determination of the value of such prop- 
 erty in the manner prescribed in section 8 of this act, 
 and when the value of such property is so ascertained, 
 such city may, upon the expiration of such contract 
 after tendering the amount of the value of such property 
 as determined by said court at once take possession of 
 such property and operate such street railroad for its 
 own use and purposes, and such city is hereby authorized
 
 242 
 
 to issue bonds for the payment in whole or in part of 
 such sum fixed as the value of such property. Should 
 said company habitually, continually or continuously 
 violate any of the provisions of this act, or fail to com- 
 ply with the ordinance approving said contract or such 
 other ordinances as are passed by the common council 
 under the provisions of this act, then said company shall 
 forfeit all its rights, title and interest in or to the use 
 and occupancy of the streets, alleys and highways of 
 said city for street railroad purposes, its contract and 
 franchise for the same shall be at an end, and the prose- 
 cuting attornej- of the county in which such city is lo- 
 cated shall, upon the writen complaint of five hundred 
 resident freeholders of said city stating wherein said 
 company shall have violated the terms of such contract 
 or ordinances or provisions of this act, bring an action 
 in the circuit or superior court of the count}* in which 
 such city shall be situated on relation of the State of In- 
 diana, to forfeit the said contract and franchise and de- 
 clare the same at an end, and such action shall be tried 
 as other actions are tried, and upon a finding and judg- 
 ment that such company has violated its said contract 
 or said ordinances or provisions of this act, as herein- 
 before provided, then said court shall enter a judgment 
 and decree declaring said contract and franchise for- 
 feited and at an end, and said city shall, through its 
 board of public works, proceed to relet the use and occu- 
 pancy of its streets, alleys and public places for street 
 railroad purposes in the manner and upon the terms and 
 conditions provided in section 8 of this act, and if said 
 action shall be determined in favor of such company, 
 then the petitioners shall be liable for the costs of said 
 action. Any such company so contracting with said city 
 shall permit the use of its track or tracks by any incor-
 
 243 
 
 porated suburban or interurban railroad company from 
 the corporate limits or from the nearest connecting point 
 within the corporate limits of such city to some central 
 point in such city, for the purpase of discharging and re- 
 ceiving passengers, with the right of such company to 
 run its cars thereon to some loop and return thereon 
 out of said city whenever such use has been permitted 
 by the board of public works and common council of said 
 city by contract approved by ordinance. That the board 
 of public works shall require in any such franchise 
 granted hereunder, such consent to be given in such fran- 
 chise with the right on the part of the board of public 
 works and common council to establish such central 
 point and designate the track or tracks to be used in 
 going to and from the same in such city. That such use 
 shall be upon such conditions and under such regulations 
 as the board of public works and the common council of 
 such city shall prescribe, and upon such terms as to con- 
 pensation as may be agreed 1 upon by such companies; 
 and in case such companies cannot agree as to such com- 
 pensation within thirty days after application made for 
 the same, then such use shall be permitted upon such 
 terms as to compensation as may be fixed and determined 
 in an action instituted by either of such companies in 
 the circuit court of the county in which such city may 
 be situated; and pending such controversy or suit, such 
 suburban or interurban company shall have the right to 
 use the track or tracks designated by the board of public 
 works or common council, upon executing a bond in such 
 amount and with such security as shall be approved by 
 said court, conditioned for the payment to such company 
 owning and operating such railway in such city the com- 
 pensation which may accrue up to the time of the final 
 decision in said action, shall be fixed 'by the court : And,
 
 244 
 
 provided, that in case the company owning and operat- 
 ing such railway in such city cannot furnish power to 
 propel the cars of such suburban or interurban company, 
 then, in that event, such snlburban or interurban company 
 shall have the right to construct and maintain a feed 
 and trolley wire on the poles or in the conduits of such 
 company to such terminal points as may be designated 
 by the board of public works and common council of 
 such city, and compensation for the use of poles and con- 
 duits for the construction and maintenance of such 
 wires is to be fixed as above provided for the use of the 
 tracks; and in such case such suburban or interurban 
 company shall have a right to establish and maintain 
 power houses and place its wires on such poles or in such 
 conduits. Provided, however, that the provisions of this 
 section shall not apply to any suburban or interurbau 
 railway company whose line, including the track or 
 tracks so designated within said city, does not extend to a 
 distance of six or more miles for such central point. 
 
 Sec. 3. All the terms and covenants of any contract 
 so made, as aforesaid, shall be binding and conclusive 
 for the period fixed therein, and no longer, and the 
 mutual rights, powers, obligations and liabilities of the 
 parties thereto, shall be as therein expressed, subject, 
 however, to all the provisions of this act. 
 
 Sec. 4. It shall be lawful for any such railroad com- 
 pany contracting as aforesaid with such city, to acquire 
 by purchase, lease or otherwise, the property and fran- 
 chises, or any portion of the same, of any other street 
 railroad company or companies now or hereafter incor- 
 porated under the laws of the State of Indiana, owning 
 or operating or possessing a franchise, to own and oper- 
 ate a street railroad within such city, or connecting
 
 245 
 
 therewith in territory adjacent thereto, for money, shares 
 of stock, or bonds or other obligations; and to issue in 
 payment for the property and franchises so purchased or 
 otherwise acquired, its bonds, obligations or shares of 
 stock to such amount, in such manner, and upon such 
 terms, as its board of directors may think proper and 
 contract; and it shall also be lawful for such company, 
 in addition to the powers possessed under the general 
 laws for the incorporation of street railroad companies 
 and the amendments thereto to secure payment of all 
 bonds or obligations so issued by it, by mortgage upon its 
 corporate franchises, rights, privileges, property, real and 
 personal, and. mixed as well as upon the franchises, rights, 
 privileges, property, real, personal and mixed, purchased 
 by it as aforesaid : Provided, that no bonds shall be issued 
 by said company for a period extending beyond the time of 
 the expiration of the contract executed under the pro- 
 visions of this act. 
 
 Sec. 5. Any street railroad company now or hereafter 
 incorporated under the State of Indiana owning or oper- 
 ating or possessing a franchise to own and operate a 
 street railroad in such city or connecting therewith in 
 territory adjacent thereto, may sell, lease or otherwise 
 transfer its property, franchises and assets of every de- 
 scription and wheresoever situated or any portion of the 
 same to any other company authorized to acquire the 
 same by purchase, lease or otherwise, under section 4 
 hereof, for money, stock or bonds or other obligations: 
 Provided, however, that such sale, lease or transfer shall 
 be authorized by the vote of a majority in value of all 
 the shares of said company, given at a meeting of the 
 shareholders called for the purpose; at such meeting a 
 resolution specifying the consideration, terms and con- 
 ditions of such sale or transfer shall be submitted to
 
 246 
 
 the shareholders for their approval or disapproval; and 
 upon the vote of a majority in value of said shareholders 
 the board of directors of the said company shall cause 
 the contract authorized by such resolution to be duly 
 executed and delivered to such purchaser, lessee or trans- 
 feree by the proper officers of the company; such meet- 
 ing of said company shall be called in pursuance of a 
 resolution of its board of directors instructing the proper 
 officers of the company to call the same, and after twenty 
 days' notice, which shall be given by writen or printed 
 notice, mailed to every stockholder at his last known 
 postoffice address. 
 
 Sec. 6. If a sale be made, approved by a vote of the 
 majority in value of all the shares of the company as 
 aforesaid, any shareholder or shareholders of such com- 
 pany not voting in favor of such sale, and who may be 
 dissatisfied with the terms thereof, may apply by petition 
 to the circuit court of the county in w T hich such railroad 
 is located, within thirty days after such shareholders' 
 meeting, praying said court to appoint three disinterested 
 persons to estimate and appraise the value of the prop- 
 erty so sold, over and above any liens or incumbrances 
 thereon and claims or indebtedness for the payment of 
 which the same may be liable, and having so appraised 
 said property and franchises, to estimate and ascertain 
 the value thereof, and the value of said shares having 
 been so appraised by the said commissioners by the vote 
 of a mapority thereof, shall be reported to said court, 
 and when confirmed by the said court shall be final and 
 conclusive on all parties. The value of the shares thus 
 ascertained shall be paid to the said petitioning share- 
 holder by the street railroad company purchasing the 
 property and franchises and other assets sold as aforesaid 
 upon surrender to the purchasing company of the shares
 
 247 
 
 so appraised. In case said petitioning shareholder shall 
 not present their shares to the purchasing company for 
 surrender within sixty days from the date of said award, 
 or in case of minority or other legal disability said pur- 
 chasing company shall make payment of the amount of 
 said award to the clerk of the court, and upon such pay- 
 ment to the clerk of the court, the property or franchises 
 purchased shall be released from the lien of said award. 
 The cost of such proceeding shall be paid by the purchas- 
 ing company. 
 
 Sec. 7. All rights of creditors and liabilities for dam- 
 ages and all liens or incumbrances upon the property or 
 franchise sold or transferred, pursuant hereto, shall con- 
 tinue unimpaired, and may be enforced as against such 
 property and franchises as if said sale or transfer had 
 not been made. 
 
 Sec. 8. No street railroad company shall hereafter 
 have the right to use or occupy for street railroad pur- 
 poses the streets, alleys, highways or other public places 
 of any such city except under and in pursuance of an or- 
 dinance or contract specifically stating the period of such 
 use or occupancy. Where such use or occupancy is now or 
 shall hereafter be had by any street railroad company 
 under any ordinance, or ordinances, contracts or agree- 
 ments in which is fixed or limited, or attempted to be 
 fixed or limited, the period of time of such occupancy, 
 or in which an extension of time originally so fixed or 
 limited, has been made, and the right and franchises of 
 such use or occupancy shall not in nine or more months 
 prior to the final expiration of the period of time so lim- 
 ited or extended, have been granted for a further definite 
 period of time to said company, or some company which 
 has acquired the property and franchise of said company
 
 248 
 
 by a contract entered into by such city, and said com- 
 pany under the provisions of this act, and in all such 
 cases, upon the final expiration of the time so originally 
 limited or extended, the right to such use, or occupancy 
 by said company, its successors and assigns, or any other 
 company claiming under such ordinance, contracts or 
 agreements, shall immediately terminate and cease for- 
 ever. Thereupon, such company, its successors or as- 
 signs, may remove its tracks and appurtenances from 
 such streets, alleys and other public places, doing no 
 more damage thereto than is necessary, and when the 
 same are removed such company, its successors or assigns, 
 shall restore such streets, alleys and public places as 
 nearly as may be, to the condition in which the same 
 were prior to such removal ; which removal shall be made 
 within a time to be fixed by the mayor of such city, and 
 the work shall be done under the supervision of the 
 street commissioner or other officer having the charge 
 and supervision of the streets therein, and upon failure 
 so to remove the same, and to elect to have the same ap- 
 propriated 1 by its successor in such use and occupancy 
 as hereinafter provided, the city may cause the same to 
 be removed at the expense of the owner: Provided, how- 
 ever, that not later than nine months before the expira- 
 tion of the period of time so originally limited or ex- 
 tended, in the event that no contract for the further use 
 and occupancy of such streets, alleys and public places 
 has been entered into under the provisions of this act 
 between such city and the said company, its successors 
 or assigns, such city, through its board of public works, 
 shall open to free competition the further occupancy for 
 a period not exceeding thirty years of the streets, alleys 
 and public places of such city, for the purpose of operat- 
 ing therein an electric or other street railroad, and such 
 city, through its board of public works, shall prescribe
 
 249 
 
 in the form of a contract to be entered into by the suc- 
 cessful bidder, all conditions and limitations for such use 
 of said streets, alleys and public places as prescribed in 
 section 2 of this act; and such other conditions as shall 
 best promote the interests of said city and the public, 
 and also a bond or undertaking with sureties to be ap- 
 proved by said board of public works, conditioned that 
 the bidder, if successful, will enter into the prescribed 
 contract in accordance with the terms and conditions 
 thereof and of the bid, and in case of failing or refusing 
 or forfeiting as hereinafter provided, the right to enter 
 into such contract, to pay to such city all damages it may 
 sustain by reason of such failure, refusal or forfeiture, 
 and, as to bidders other than the occupying company, 
 that the bidder, if successful, and in case the occupying 
 company elect not to remove its tracks and other prop- 
 erty from the streets, will immediately institute as here- 
 inafter provided, proceedings to appropriate the property 
 of said company and pay the assessed value of such 
 property to said company or other person entitled there- 
 to as hereinafter provided. In such competition no com- 
 pany now or hereafter organized for such purpose shall 
 be excluded. If the occupying company shall not be the 
 successful competitor, and elects not to remove its tracks 
 or other property from the streets, then the company 
 that shall be successful in the competition shall imme- 
 diately after the acceptance of its bid by such city 
 through its board of public works, file in the circuit court 
 of the county where such city is located, a complaint or 
 petition for an appropriation of the property of the oc- 
 cupying company and an assessment of its damages by 
 reason of such appropriation, describing the plant, prop- 
 erty, power houses, cars, electric lines and poles, and all 
 other appurtenances and appliances connected with and
 
 250 
 
 used as a part of the railway system of the occupying 
 company to be appropriated, and showing the execution 
 of the bond or undertaking aforesaid, to which proceed- 
 ings all persons having an interest in or lien upon such 
 property shall be made parties. The practice and pro- 
 ceedings upon such appropriation, and in ascertaining 
 the value of such plant and property, shall be as is now 
 provided for the appropriation of property for railway 
 purposes under the general laws of this state. When the 
 value of this property is so ascertained upon the expira- 
 tion of the contract of the occupying company, or if such 
 contract has expired before the ascertainment of such 
 value, then, within a time to be fixed by such court, such 
 appropriating company shall pay such value to the clerk 
 of the court for the use of the occupying company, or 
 other person entitled thereto as determined by the court; 
 and upon such payment, the appropriating company shall 
 be seized and become the owner, free and unincumbered, 
 of all the title to and of the property so appropriated, 
 and shall take possession of and operate such railroad 
 system from and after the expiration of the contract of 
 the occupying company; and upon failure to institute 
 such proceedings, or to enter into or perform the con- 
 tract in accordance with the bid, all right of the success- 
 ful bidder to enter into the contract, or to the use and 
 occupancy of the streets, shall be forfeited, and such city, 
 through its board of public works, shall proceed to relet 
 the use and occupancy of the streets, alleys and public 
 places for street railroad purposes in the manner and 
 upon the terms and conditions heretofore provided in 
 this section, and several actions may be maintained upon 
 such bond or undertaking by such city, occupying com- 
 pany or other company or person interested, for such 
 failure to perform its conditions. In case the railroad
 
 251 
 
 company owning the property to be appropriated has 
 theretofore acquired rights to lay and maintain tracks 
 outside, of the corporate limits of such city secured from 
 the board of commissioners of the county, which tracks 
 at the time of such appraisement, by reason of the ex- 
 tension of the corporate limits, are within such city, the 
 same, at the election of the owner, may be embraced in 
 such proceedings and appraisement. 
 
 Sec. 9. Nothing contained in this act shall be so con- 
 strued as to take away from the board of public works 
 and common council of any such city, the exclusive 
 powers now exercised over the streets, highways, alleys 
 and bridges within such city, or the rights and powers 
 now possessed by such board of public works and com- 
 mon council to enter into contract with reference to the? 
 use of the streets, alleys and public places in such city 
 for streets railroad purposes, except insofar as such 
 powers and rights shall be affected by contracts entered 
 into pursuant to the provisions of this act, and except as 
 such powers are reserved to such city by the provisions 
 of this act. 
 
 Sec. 10. It shall be unlawful for any railroad com- 
 pany operating under a contract secured under the pro- 
 visions of this act or an employe of the same to charge 
 or receive any greater amount for fares than that pro- 
 vided for in this act, and it shall be unlawful to fail or 
 refuse to keep on sale tickets as provided in this act, and 
 anyone violating any of the provisions of this section 
 shall be fined in any sum not to exceed one hundred dol- 
 lars. 
 
 Sec. 11. All laws and parts of laws inconsistent with 
 the provisions of this act are hereby repealed.
 
 252 
 
 Sec. 12. It is declared that an emergency exists for 
 the immediate taking effect of this act, and the same 
 shall therefore be in full force from and after its pas- 
 sage.
 
 253 
 
 No. 2. 
 
 AN ORDINANCE. 
 
 Authorizing the Chicago City Railway Company to Con- 
 struct, Maintain and Operate a System of Street Kail- 
 ways in Streets and Public Ways of the City of Chi- 
 cago. 
 
 (February 11, 1907.) 
 
 PREAMBLE. 
 
 Whereas, the Chicago City Kailway Company, herein- 
 after called the Company, now maintains and operates 
 a system of street railways in the streets and public 
 ways in the south division of the City of Chicago; and 
 
 Whereas, the said city desires, for the proper accom- 
 modation of the public, to provide for the reconstruction, 
 re-equipment and extension of the said street railway 
 system now maintained and operated by the Company 
 and for the unified operation of said street railway sys- 
 tem together with the street railway system now main- 
 tained and operated by the receivers of the Chicago Union 
 Traction Company, and to be in a position as soon as 
 practicable freely to deal with the subject of transpor- 
 tation in its streets as a whole, and to fix and determine 
 the definite terms and conditions upon which the said 
 city shall have the right to purchase and take over at 
 any time the street railway system of the Company; now, 
 therefore, 
 
 Be it ordained by the City Council of the City of Chicago : 
 
 AUTHORITY. 
 
 Section 1. That in consideration of the acceptance 
 by the Company of this ordinance, subject to all of tlu>
 
 254 
 
 provisions, conditions, requirements and limitations here- 
 of, consent, permission and authority are hereby granted 
 to the Company, its lessees, successors and assigns, to 
 construct, reconstruct, maintain and operate a system 
 of street railways in, upon and along the streets and pub- 
 lic ways or portions thereof, in the City of Chicago, set 
 out in the schedule marked "Exhibit A" hereto attached 
 and made a part hereof. 
 
 The said consent, permission and authority hereby 
 granted to said Company, its lessees, successors and as- 
 signs, to construct, reconstruct, maintain and operate the 
 said street railways in, upon and along 22d street from 
 the east bank of the Chicago river to Wabash avenue, 
 are granted subject to all of the rights, franchises and 
 privileges of the Chicago General Railway Company upon 
 said 22d street between the points mentioned, under and 
 by virtue of a lease of said tracks from the Chicago City 
 Eailway Company to the Chicago General Railway Com- 
 pany dated July 5, 1897; but shall wholly cease and de- 
 termine on the 8th day of February, A. D., 1912, and 
 are subject at all times to all the provisions, conditions 
 and limitations of this ordinance, including the right of 
 the city or its licensee to purchase and acquire said 
 tracks and all of the rights hereby granted, at the times 
 and upon the terms hereinafter provided 1 . 
 
 The said consent, permission and authority hereby 
 granted to said Company, its lessees, successors and as- 
 signs, to construct, reconstruct, maintain and operate 
 the said street railways in, upon and along Main street, 
 from Archer avenue to 31st street, and Laurel street 
 from 31st street to 39th street, are granted subject to all 
 of the rights, franchises and privileges of the Chicago 
 General Railway Company upon said Main and Laurel
 
 255 
 
 streets between the points mentioned, under and by vir- 
 tue of a lease of said tracks from the Chicago City Rail- 
 way Company to the Chicago General Railway Company, 
 dated October 1, 1897, but shall wholly cease and deter- 
 mine on the 4th day of February, A. D., 1915, and are 
 subject at all times to all the provisions, conditions and 
 limitations of this ordinance, including the right of the 
 city or ite licensee to purchase and acquire said tracks 
 and all of the rights hereby granted, at the times and 
 upon the terms hereinafter provided. 
 
 For the purpose of carrying into effect the desire of 
 the said city to provide for the unified operation of said 
 street railways, an ordinance similar to this ordinance 
 in general provisions and character, running to the Chi- 
 cago Railways Company, as grantee, covering the system 
 of street railways now maintained and operated by the 
 receivers of the Chicago Union Traction Company in the 
 north, west, and a portion of the south divisions of said 
 city, has been presented for passage concurrently with 
 this ordinance, and it is hereby expressly provided that, 
 upon the passage and acceptance of said last mentioned 
 ordinance, then in all cases where this ordinance and the 
 said ordinance relating to the street railways now main- 
 tained and operated by the receivers of the Chicago 
 Union Traction Company confer grants upon more than 
 one company in the same part of any street, the rights 
 granted to the respective companies in such part of any 
 street shall be construed to be for a mutual and joint 
 use of tracks, and the rights of each company therein 
 shall be the same as though tho said ordinances making 
 such grants had been passed and had taken effect con- 
 currently, without regard to the actual dates of their 
 respective passage and acceptance. Whenever such tracks 
 are to bo used jointly, they shall be constructed, main-
 
 256 
 
 tained and operated at the equal joint expense of the 
 said companies. 
 
 RECONSTRUCTION. 
 
 Sec. 2. The Company shall proceed at once to recon- 
 struct portions of its track and roadbed and put its en- 
 tire street railway system, plant and equipment in first- 
 class condition, in full compliance with the specifications 
 and provisions for such work in this ordinance and in the 
 exhibit hereto attached, marked "Exhibit B" and made a 
 part of this ordinance, with the same force and effect as 
 though herein fully set forth, and to operate and main- 
 tain said system in accordance with the provisions of this 
 ordinance and of said "Exhibit B." 
 
 Such provisions of this ordinance as are in the nature 
 of specifications shall be given at all times full force and 
 effect, except in cases, if any, in which they conflict with 
 express provisions of "Exhibit B," in which cases the lat- 
 ter shall prevail. The provisions of this ordinance and 
 those of "Exhibit B," however, shall be construed to- 
 gether, and both, so far as practicable, be given full effect 
 throughout the life of this grant. 
 
 EXTENSIONS. 
 
 Sec. 3. The said city shall have the right, subject to 
 the limitations contained in this ordinance, at any time 
 to require the Company to make extensions of and addi- 
 tions to the lines of street railway enumerated in said 
 "Exhibit A." Such extensions and additions shall be 
 made under the supervision of the board of supervising 
 engineers, as hereinafter in section 7 provided, and the 
 cost thereof shall be determined as provided in said sec- 
 tion. The character and quality of such work shall com-
 
 257 
 
 ply with the specifications set forth in said "Exhibit B," 
 so far as the same may be applicable thereto. 
 
 The Company shall promptly and within a reasonable 
 time after the passage of this ordinance construct and 
 equip the extensions of its street railway system provided 
 for in "Exhibit A," and also in section 36 hereof, subject 
 to the provisions of said section, and shall operate same 
 as a part of its system in conformity with the provisions 
 of this ordinance, and at any time after three (3) years 
 from the acceptance of this ordinance, the Company shall 
 upon the order of the city council of the city, construct 
 and equip such additional extensions as may be required 
 by the city and shall operate the same as a part of its 
 system in conformity with the provisions of this ordi- 
 nance; provided, that the Company shall not be obligated 
 hereby to construct and operate any such additional ex- 
 tension in any street or public way nearer any then ex- 
 isting parallel street railway tracks of the Company than 
 one-half mile, and that the Company shall not be obli- 
 gated hereby to construct more than four miles of double 
 track railway or eight miles of single track railway in 
 any one calendar year during the term of this grant. 
 
 The Company shall, however, upon the order of the 
 city council of the city, construct, equip and operate such 
 extensions of its street railway system in addition to 
 those hereinabove provided for as may be required by 
 the city council subject to the conditions and limitations 
 contained in section 25 of this ordinance. 
 
 The Company shall not be authorized or obligated to 
 construct any extension of its street railway system upon 
 streets on which street railways are not located when 
 this ordinance goes into effect until the city has granted
 
 258 
 
 to the Company whatever authority in addition to this 
 ordinance may be necessary to comply with the frontage 
 consent laws of the State of Illinois. 
 
 MOTIVE POWER. 
 
 Sec. 4. The motive power to be used in the operation 
 of said street railways shall be electricity, applied by the 
 overhead trolley system or otherwise, as more particu- 
 lary set forth in said "Exhibit B" ; provided that the said 
 city (subject to the limitations contained in section 25 
 hereof), at any time after three years from the date of 
 the acceptance of this ordinance, may require by ordi- 
 nance, that the Company shall operate under the pro- 
 visions of this ordinance any of its street railways herein 
 authorized by electric power transmitted through work- 
 ing conductors carried in conduits below the surface of 
 the street and between and underneath the rails, other- 
 wise known as the underground trolley system, and shall 
 thereafter cease to operate the same by overhead trolley. 
 
 USE OF POLES, CONDUITS,, ETC. 
 
 Sec. 5. The Company may use its trolley poles, feeder 
 poles, trolley wires, feeder wires and the conduits author- 
 ized and provided for in said Exhibit B, for all purposes 
 solely connected with the operation of its street railways, 
 such as power, light, heat and telephonic and other sig- 
 nals. For such purposes the Company may connect such 
 conduits, poles and wires with its transmission and 
 feeder wires, power plants, substations, car houses, 
 repair shops or other property of the Company, and with 
 any transmission, feeder or other wires of any other in- 
 dividual or corporation.
 
 259 
 
 JOINT USB WITH THE CITY. 
 
 The said city shall have the right, without the pay- 
 ment of any compensation therefor, during the life of 
 this grant, to use the poles of the Company to carry the 
 signal, telephone, telegraph and electric light wires and 
 lamps of the said city. The transmission wires of the 
 said city for such purposes shall be placed on poles of 
 the Company, on that side of each street or way (where 
 poles are located on both sides thereof) designated by 
 the said board of supervising engineers, without cost or 
 expense to the Company, but the Company shall repair 
 and maintain its poles as one of the operating expenses 
 of the said street railway system under this ordinance; 
 provided, that the said city shall indemnify and save 
 harmless the Company against and from all damages, 
 judgments, costs or expenses which the Company may 
 suffer by reason of any negligence of the said city in in- 
 stalling, maintaining or using its said wires and lamps 
 upon said poles. 
 
 SUBWAYS. 
 
 Sec. 6. The Company hereby gives to said city and 
 said city reserves the power by ordinance to require the 
 Company to join with the Chicago Railways Company 
 and with the said city in defraying the cost of the con- 
 struction of a system of subways for the joint use of the 
 said companies as down town terminals of their street 
 railway systems, and for the use of said city and of its 
 licensees, the legal title to said subways to be in said city, 
 subject to the rights of the said companies under this 
 ordinance, it being, however, an express condition of the 
 Company being required to join in defraying the cost of 
 such construction of such system of subways, that said 
 subway system and the extension thereof shall not be
 
 260 
 
 used for street railway purposes during the life of this 
 grant except by the street railway systems of said com- 
 panies; provided, that the companies shall not be re- 
 quired to contribute to the cost of said subway system 
 any amount in excess of the pro rata cost of that part 
 of said subway system which is to be devoted to the use 
 of said companies or either of them and that the total 
 amount which the said companies shall be required to 
 contribute toward the construction of said system of sub- 
 ways shall not exceed the sum of five million dollars 
 (15,000,000), exclusive of the cost of (1) reconstructing 
 the present tunnels under the Chicago river, (2) or of 
 converting said tunnels into a part of said system of sub- 
 ways. Two-fifths of that part of the cost of the said 
 subways (exclusive of the tunnels under the Chicago 
 river), payable by said companies shall be borne by the 
 Company and three-fifths of the said cost shall be borne 
 by said Chicago Railways Company; and provided, fur- 
 ther, the Company shall not be obligated to join in de- 
 fraying the cost of the construction of such subway sys- 
 tem until (1) the said city shall authorize the construc- 
 tion of said subway system by an ordinance which shall 
 prescribe the location, character and extent of said sub- 
 way system and the plans and specifications therefor, 
 which plans and specifications shall include provisions 
 specifying the portions thereof to be devoted to the use 
 of said companies, respectively, and to the use of the 
 said city and its licensees, and regulating the manner of 
 such uses, and specifying the share of the cost of such 
 subway system to be borne by said companies and the 
 extent of the user to which each said company shall be 
 entitled in that part of said subway system devoted to 
 street railway purposes, and until, (2) the board of 
 supervising engineers shall approve the location, charac-
 
 261 
 
 ter and extent of and the plans and specifications for 
 
 such subway system. The limitation of five million dol- 
 lars as above defined shall apply to the subway system 
 
 * 
 
 above mentioned, but shall have no application to the ex- 
 tensions and additions herein next mentioned. 
 
 When said subway system shall have been fully com- 
 pleted (but not before the expiration of five years from 
 and after the acceptance of this ordinance) the Company 
 (subject to the limitations contained in section 25 here- 
 of) may be required by ordinance to join with the said 
 Chicago Railways Company and with the said city in 
 defraying the cost of the construction of extensions and 
 additions to such subway system and the Company 
 agrees that it will pay to the said city the pro rata cost 
 of constructing that portion of such extensions which is 
 to be devoted to the use of the Company and its propor- 
 tionate part of the pro rata cost of constructing that 
 portion of such extensions which is to be devoted to the 
 joint use of the said companies; provided, however, the 
 Company shall not be obligated to join in defraying the 
 cost of the construction of such extensions and additions 
 to said subway system until (1) the said city shall au- 
 thorize the construction of said extensions and additions 
 by an ordinance which shall prescribe the location, char- 
 acter and extent of said extensions and additions and the 
 plans and specifications therefor, which plans and speci- 
 fications shall include provisions specifying the portions 
 to be devoted to the use of said companies and to the 
 use of said city and its licensees, and regulating the man- 
 ner of such uses and specifying the part of the total es- 
 timated cost of such extensions and additions to be borne 
 by the said companies, respectively, and until (2) the 
 location, character and extent of said extensions and ad- 
 ditions and the plans and specifications therefor shall be 
 approved by the said board of supervising engineers.
 
 The provisions of this ordinance under which the said 
 Company obligates itself to contribute to the cost of con- 
 structing subways and extensions of subways and fixing 
 the conditions under which the said Company is so ob- 
 ligated shall not have the effect or be construed to have 
 the effect of depriving the said city of any right which 
 the said city may have or acquire (otherwise than by 
 virtue of this ordinance) to construct subways or exten- 
 sions thereof, or to compel said Company to contribute 
 to the cost of such subways or extensions, or to compel 
 said Company to use the subways in whole or in part, in 
 connection with its street railways or to fix the terms 
 and conditions of such use. By the acceptance of this 
 ordinance the Company admits that the city has the right 
 and authority to construct subways and extensions of 
 subways in the streets and parts of streets described in 
 "Exhibit A" and in all other streets or parts of streets 
 in which the Company is now or hereafter authorized to 
 construct or orperate street railways and the Company 
 by such acceptance consents to the exercise of such right 
 by the city; but the Company by the acceptance of this 
 ordinance shall not be construed as admitting that the 
 city now has any right otherwise than by virtue of this 
 ordinance to compel said Company to contribute to the 
 cost of any subway or extension thereof, or to compel 
 said Company to use subways in whole or in part in con- 
 nection with its street railways or to fix the terms and 
 conditions of such use, or that it could acquire such 
 right, and the exercise by the city of any such right shall 
 not impair or in anywise affect the rights of the Com- 
 pany under the provisions of this ordinance in that part 
 of any subway, or extensions thereof, to the cost of con- 
 structing which the Company shall have contributed.
 
 263 
 
 Nothing in this ordinance contained shall be construed 
 to give the said city the power to require the Company 
 in case of the construction of said subway system, or ex- 
 tensions and additions thereto, and the placing of its 
 railway tracks therein, or in a part thereof, to cease the 
 operation of its railway, during the life of this grant, 
 upon the surface of any of the streets or parts of streets 
 under which the said subway system, or said extensions 
 and additions thereto, may be constructed, so long as or 
 whenever the city shall permit the construction or opera- 
 tion of any street railways upon the surface of such 
 streets or parts of streets, respectively. 
 
 It is expressly provided that in case the capacity of 
 that portion devoted to street railway purposes, of any 
 subways or extensions of subways, constructed under the 
 provisions of this section of this ordinance, shall at any 
 time be greater than necessarily and properly required 
 for the use of the said company or companies which have 
 contributed to the cost of said subways or extensions 
 thereof in the operation of their street railways therein, 
 the city may authorize or require any other Company 
 operating elevated railways in said city to use said sub- 
 ways and extensions, or parts thereof, to the extent of 
 such surplus capacity, but only to such extent, provided 
 that such Company shall pay a reasonable rental for 
 such use by it, which rental shall be apportioned between 
 the parties who have contributed to the cost of construct- 
 ing the portion of such subways or extensions so used 
 by such other company in proportion to the extent of 
 their respective contributions; and the portion of such 
 rental so paid to the Chicago City Railway Company 
 shall be considered and treated as part of its gross re- 
 ceipts, to be disposed of under the provisions of this 
 ordinance as other gross receipts from the operation of
 
 264 
 
 the street railways of said Company are to be disposed 
 of. The city shall have the right to use the said subways 
 and extensions for any elevated railway belonging to 
 said city to the same extent and upon the same terms 
 that it may authorize or require their use by any elevated 
 railway company. 
 
 CITY TO HAVE SUPERVISION OF REHABILITATION. 
 
 Sec. 7. All of the construction, re-construction, equip- 
 ment, re-equipment, extensions and additions to plant 
 and property provided for or required by this ordinance 
 or the exhibits thereto, including underground trolleys, 
 new lines, extensions, and other additions to plant and 
 property (but not subways or extensions thereof), shall 
 be done, performed and acquired by the Company under 
 the direction and supervision of said board of supervis- 
 ing engineers, and the cost and expense thereof shall be 
 borne and paid by the Company, but no contract, sub- 
 contract or payment therefor shall be made without the 
 written approval of said board. 
 
 The Company shall purchase materials and equipment, 
 and employ engineers, superintendents, clerks, foremen 
 and workmen and shall pay all expenses of every nature, 
 including legal expenses necessary to the proper, com- 
 plete and prompt performance of the above mentioned 
 work, upon the lowest advantageous terms and subject 
 to the approval of the said board of supervising en- 
 gineers, and to the actual amount paid by the Company 
 in and about carrying out each and all of the require- 
 ments of this section, shall be added 10 per cent of such 
 amount as a fair and proper allowance to the Company 
 for conducting the said work and furnishing said equip- 
 ment and 5 per cent for its services in procuring funds 
 therefor, including brokerage.
 
 265 
 
 The said board of supervising engineers shall, on or 
 before the fifteenth day of each month, make a report in 
 writing, dated the first day of such month, to the city 
 comptroller of the amount of money actually expended 
 during the previous month by the Company with the ap- 
 proval of said board of supervising engineers in and 
 about carrying out the requirements of this section to- 
 gether with the percentages of such amount in the next 
 preceding paragraph provided for, and all amounts con- 
 tributed by the Company to the cost of the said subway 
 system or extensions thereof together with 5 per cent 
 of the amounts so contributed; and the interest provided 
 in section 24 hereof as a deduction from gross receipts 
 shall begin to run upon the total amount of each sucli 
 certificate from and after the date thereof. 
 
 The total amount so certified by the said board of su- 
 pervising engineers (including the said additional per- 
 centages thereof as hereinabove provided) shall be final 
 and binding upon both parties hereto and shall be con- 
 clusively held and taken as the cost of the said construc- 
 tion, reconstruction, equipment, re-equipment, extensions 
 and additions to plant and property, including subways, 
 underground trolleys, new lines, and other additions to 
 plant and property, which shall be paid by the said city 
 upon the taking over of the said street railway system 
 as in this ordinance provided, except that said board 
 may at any time within sixty (60) days after the date 
 of any such certificate correct any error or omission 
 therein. 
 
 The said board of supervising engineers shall have 
 power to determine what work shall be treated as con- 
 struction, reconstruction, equipment, re-equipment, ex- 
 tensions, new lines, underground trolleys or additions 
 to plant or property to be paid for by the Company out
 
 266 
 
 of the capital funds to be provided by it for that pur- 
 pose, and what shall be treated as maintenance, repairs 
 and renewals, to be paid for out of the gross receipts of 
 the Company from the operation of the street railway 
 system hereby authorized. But any such determination 
 of said board shall be governed by the following pro- 
 visions: 
 
 During the three (3) year period of "immediate reha- 
 bilitation" seventy (70) per cent of the gross receipts 
 shall be set apart and shall be used so far as required 
 in defraying the operating expenses, including mainte- 
 nance and repairs, and the residue of said seventy (70) 
 per cent shall be applied to the cost of renewals and no 
 part of the cost of any renewal paid for out of such sev- 
 enty (70) per cent shall be charged to additional capital, 
 and all expenditures for renewals during said three (3) 
 years in excess of such residue of said seventy (70) per 
 cent shall be charged to capital account. 
 
 After such three (3) year period of "immediate reha- 
 bilitation," the cost of renewals shall be paid as provided 
 in section 16 hereof, but such expenditures (and only 
 such expenditures) as are made for the purpose of exten- 
 sions of or additions to property shall be thereafter con- 
 sidered as additions to capital, provided, however, that 
 in the replacement of any principal part of the property, 
 either existing or hereafter acquired, there snail be 
 charged to capital the excess amount that the new prop- 
 erty cost over the original cost of the property displaced, 
 excepting that the value of property contained in the 
 appraisal inventory of the property of the Company, 
 referred to in paragraph 1 of section 20 hereof, shall be 
 used instead of first cost for all property listed in such 
 appraisal inventory.
 
 267 
 
 REMOVAL OP TRACKS. 
 
 Sec. 8. The Company shall forthwith remove all 
 tracks now owned or operated by it which it is not ex- 
 pressly authorized by this ordinance hereafter to main- 
 tain and operate. If it shall hereafter cease to operate 
 over any of its tracks or any portion thereof, it shall re- 
 move such unused tracks upon the order of the city coun- 
 cil. Failure to operate cars for the carriage of passen- 
 gers at least once each way within every hour of each 
 day between the hours of six (6) A. M. and eight (8) 
 P. M. over any part of a street or public place in which 
 tracks of the Company are laid, shall be treated as a 
 cessation of operation of its tracks in such part of street 
 or public place within the meaning of this section, unless 
 such operation is interfered with by unavoidable acci- 
 dents, labor strikes or litigation brought without conniv- 
 ance of the Company; provided, however, that the fore- 
 going provisions of this section shall not be construed 
 to require or authorize the removal of curves or turn-outs 
 or of connecting tracks specifically authorized by this 
 ordinance or the exhibits hereto to be constructed and 
 maintained for use during rush hours or for emergency 
 use in case of fire or accident, or such tracks as may 
 be necessary for a connection with the Company's prop- 
 erty used for street railway purposes. 
 
 The city shall have the right by ordinance to require 
 the Company to remove any tracks or portions thereof, 
 the further maintenance of which is at any time no 
 longer warranted by the traffic, or reasonably required 
 in the operation of the said street railway system, pro- 
 vided that the Company shall not be required to remove 
 such tracks but may maintain or reconstruct and operate 
 the same during the life of this grant so long as or when- 
 ever the city shall permit the construction or operation
 
 268 
 
 of any street railways upon the streets or parts of streets 
 respectively from which such tracks have been so re- 
 quired to be removed and in every case of removal of 
 tracks as aforesaid, the Company shall restore the street 
 or public way to the condition of the other portion there- 
 of, all at its own cost, such cost to be treated as an oper- 
 ating expense. 
 
 If the Company shall fail within a reasonable time (not 
 to exceed 30 days) to remove any such tracks on order 
 of the commissioner of pu'blic works, the said city may 
 remove them, charging the expense thereof to the Com- 
 pany; provided, however, that nothing in this section 
 contained shall relieve the Company from its obligations 
 at all times to render adequate service on its street rail- 
 ways. 
 
 RIGHT TO SELL UNNECESSARY PROPERTY. 
 
 Sec. 9. The Company shall not hereafter sell any of 
 the property belonging to it at the time of the passage 
 of this ordinance (except that described in "Exhibit D") 
 or thereafter acquired by it as an addition to or exten- 
 sion of, or for use in connection with its said street rail- 
 ways, except as the same may become unnecessary or un- 
 adapted to the proper operation and maintenance of said 
 street railways under the terms of this ordinance, and 
 before making any such sale the Company shall secure 
 the written approval of such sale and of the amount and 
 terms thereof by the said board of supervising engineers, 
 and such written approval of said board shall be con- 
 clusive of the right of the Company to transfer complete 
 title to the purchaser, who shall not be obliged to look 
 to the application of the proceeds of such sale. 
 
 In the event of any such sale made during the period 
 of "immediate rehabilitation," the proceeds shall be de- 
 ducted from the amount allowed to the Company for
 
 269 
 
 such reconstruction, and in the event of a sale after such 
 "immediate rehabilitation" is completed, the proceeds 
 thereof shall be deposited with the depositary or deposi- 
 taries selected under the provisions of section 16 of this 
 ordinance and shall constitute a part of and an addition 
 to the reserve fund provided for in said section for re- 
 newals and depreciation. 
 
 SERVICE REGULATIONS. 
 
 Sec. 10. The Company hereby agrees to comply with 
 all reasonable regulations of the service of the said street 
 railway system which may be prescribed from time to 
 time by the city council of said city and that the ap- 
 proval of any such regulation by the board of supervising 
 engineers' shall be binding upon the Company (but not 
 upon the city) as to the reasonableness thereof. 
 
 STYLE OF CARS. 
 
 All passenger cars operated by the Company shall be 
 used for the carriage of passengers only. All such cars 
 hereafter built or purchased shall be of the best and most 
 approved finish, style and design to be approved by the 
 board of supervising engineers; they shall have center 
 aisles; they shall be without running footboards along 
 the sides, and shall be equipped with sufficient motor 
 capacity. Cross-seats facing forward shall be used, but 
 longitudinal seats, each seating not more than four pas- 
 sengers, may be used at the ends of the cars. All closed 
 cars shall be vestibuled, and shall be of the style and de- 
 scription specified and provided in said "Exhibit B, v 
 and at least one hundred fifty (150) cars of such descrip- 
 tion shall be acquired by and placed in operation upon 
 the tracks of the Company within one (1) year from 
 passage of this ordinance, exclusive of delays occa-
 
 270 
 
 sioned by strikes or other causes beyond the control of 
 the Company. 
 
 PUSH BUTTONS. 
 
 All cars operated by the Company shall be supplied 
 with a sufficient number of electric bells, connections and 
 push buttons to enable passengers without inconvenience 
 to notify the conductor of their desire to leave the car. 
 
 FENDERS. 
 
 All cars shall be equipped with efficient and service- 
 able fender devices, headlights and sand-boxes. 
 
 BRAKES. 
 
 Each double-truck car shall be equipped with two sets 
 of brakes, one of which shall be a hand-brake and the 
 other an efficient power-brake of modern, improved type. 
 
 CLEANLINESS AND VENTILATION. 
 
 Said cars shall at all times be kept clean and in good 
 repair, and shall be thoroughly ventilated. 
 
 HEATING. 
 
 The said cars shall be kept heated at the temperature 
 of fifty (50) degrees Fahrenheit, as nearly as practica- 
 ble, and each car shall contain a standard thermometer 
 appropriately placed to enable passengers to see that this 
 provision is complied with. 
 
 LIGHTING. 
 
 All cars shall be kept well and sufficiently illuminated 
 by electric light or other illuminants approved by said 
 Board of Supervising Engineers. 
 
 SIGNS. 
 
 Each car shall bear appropriate and conspicuous signs 
 upon both its sides and ends so placed as to indicate,
 
 271 
 
 both day and night, the route and destination of such 
 car. At night such signs Shall be illuminated. 
 
 ADVERTISEMENTS. 
 
 The company may permit advertisements in its cars, 
 but no advertisement shall be placed upon the outside 
 of any car, and only the space between the top of the 
 windows and the transom of the car shall be used for 
 advertisements on the inside of cars. 
 
 FUNERAL CARS AND MAIL CARS. 
 
 The company is hereby authorized and permitted to 
 operate funeral cars, and separate cars for the use of the 
 United States Post Office Department, for the carriage 
 of mail. 
 
 SINGLE CARS ONLY. 
 
 Every electric car shall be in charge and under the con- 
 trol of two competent men, a motorman and a conductor, 
 and (after the expiration of one year from the date of 
 the passage of this ordinance, or at such earlier time as 
 the company shall be able to acquire the necessary roll- 
 ing stock to enable it to abandon trailers) shall be oper- 
 ated singly. 
 
 RATES OF FARE. 
 
 Sec. 11. The company, except as to chartered cars to 
 private parties and as in this ordinance provided, shall 
 be entitled to charge passengers, during the term of this 
 ordinance, the following rates of fare, to-wit : 
 
 For a continuous trip in one general direction, within 
 the present or future limits of the city, over its street 
 railways covered by this ordinance and all extensions 
 thereof (whether owned, leased or operated by it) the 
 sum of five cents (5c) for each passenger twelve years 
 of age or over, and three cents (3c) for each passenger
 
 272 
 
 under twelve (12) years of age; provided that children 
 under seven (7) years of age accompanied by a person 
 paying fare shall be permitted to ride free. 
 
 UNIVERSAL TRANSFERS. 
 
 Every such passenger may demand and upon such de- 
 mand shall receive from the conductor of the car upon 
 which he first takes passage, or from some authorized 
 agent of the company, a transfer. Said transfer shall 
 entitle such passenger to ride upon any other line of said 
 street railway system owned, leased or operated by the 
 company or any other line of street railway operated by 
 any other corporation from which the company is by this 
 ordinance obligated to accept transfers, which connects 
 with, crosses, intersects or comes within a distance of two 
 hundred (200) feet of the line of said street railway upon 
 which the passenger first took passage and paid his fare. 
 But this obligation shall not apply to any connecting 
 point in the south division of the city of Chicago north 
 of Twelfth street, except that upon the completion and 
 operation of subways under the provisions of this ordin- 
 ance, transfers shall be given at all points within said 
 subways where lines of railway of any such corporation 
 or corporations connect with each other. 
 
 The payment of a single fare shall not entitle a pas- 
 senger to reverse his general direction of travel. If 
 necessary to enable a passenger to reach his destination 
 the conductor or other authorized agent of the company 
 shall issue without additional charge, a transfer upon a 
 transfer, the same as required upon payment of a cash 
 fare; the intention being that for a single fare the com- 
 pany shall carry any passenger for a single continuous 
 ride over any of the said lines of street railway owned, 
 operated or leased by it, within the limits of the said 
 city, so long as such ride is in the same general direction,
 
 273 
 
 although some of the lines necessary to be used by such 
 passenger in arriving at his destination intersect or cross 
 one another, or do not conform to such direction. 
 
 In every instance the transfer given to a passenger 
 may designate the point or place of transfer, and the 
 same must be used at such point or place, within a rea- 
 sonable time, not exceeding fifteen (15) minutes after 
 such point or place is reached by the car from which the 
 passenger is transferred, provided that within said fifteen 
 minutes a car shall pass such point or place of transfer 
 in the direction and upon the route indicated by said 
 transfer; but if no car shall pass such point within said 
 time the passenger shall have the right to take the first 
 available car passing such point in the direction indicated 
 upon the passenger's transfer. A passenger upon any 
 car delayed through the fault, negligence or inability of 
 the company shall be entitled to receive a transfer to a 
 car upon the nearest line of the company going in the 
 same general direction as the delayed car. 
 
 The company shall also on its cars accept and honor as 
 fares, transfers issued to passengers upon any line of 
 street railway covered or authorized by the said ordin- 
 ance to the Chicago Railways Company, hereinabove re- 
 ferred to as presented for passage in the city council of 
 said city, concurrently with this ordinance, which con- 
 nects with any of said lines of the company, under the 
 same conditions and with like effect as though both lines 
 of street railway were owned by the company and the 
 transfers were issued under the foregoing provisions of 
 this ordinance, but this obligation shall not apply to any 
 connecting points north of Twelfth street and east of 
 the south branch of the Chicago river and south of the 
 main Chicago river, except that upon the completion and 
 operation of subways under the provisions of this ordin-
 
 274 
 
 anee, transfers shall be given by and between said com- 
 panies at all points within said subways where their 
 lines of railway connect with each other. 
 
 The company shall also accept and houor as fares 
 transfers issued by the Chicago General Railway Com- 
 pany at all points where the railway lines of the com- 
 pany connect with or intersect the lines of said Chicago 
 General Eailway Company, constructed and in operation 
 at the time of the passage of this ordinance, with like 
 effect as though both said lines of street railway were 
 owned by the company and the transfers were issued 
 under the foregoing provisions of this ordinance; upon 
 condition, however, that said Chicago General Railway 
 Company shall accept and honor at such transfer points, 
 as fares, transfers issued by the company. 
 
 The said proposed arrangement contemplates that in 
 every instance the street railway company accepting any 
 such transfer shall give to the passenger presenting it 
 the same accommodations and the same transfers, if re- 
 quested, to its other line or lines, as such passenger would 
 be entitled to receive if he had paid a cash fare. The 
 company shall also exchange transfers with all existing 
 street car lines operating in the city of Chicago, not here- 
 tofore mentioned, under reasonable regulations and at all 
 points of connection between such lines and the lines of 
 the company, after such time as said several franchises? 
 of said other lines now operating shall have expired and 
 shall be extended or renewed. 
 
 The company, acting by itself or in conjunction with 
 the other companies to which the provisions of this sec- 
 tion apply, may, with the approval of the said Board of 
 Supervising Engineers, adopt reasonable rules and regu- 
 lations not inconsistent with the provisions of this ordin- 
 ance, for the transfer of passengers as provided for here-
 
 275 
 
 in, and for the prevention of the fraudulent use of trans- 
 fer privileges. 
 
 The purchase or acquisition by the city or its licensee 
 of any street railway or railways of any company other 
 than the Chicago City Railway Company shall not affect 
 or impair the obligations of the company under the pro- 
 visions of this ordinance with regard to transfers and 
 through routes in connection with, or over the line or 
 lines so purchased or acquired, but the same shall there- 
 after continue in full force and effect. 
 
 NO PASSES: EMPLOYES,, POLICEMEN AND FIREMEN FREE. 
 
 Sec. 12. No passes of any kind or description shall 
 be issued or given to any person, and no person, except 
 employes of the company, policemen and firemen, respec- 
 tively, in full uniform, shall be permitted to ride upon 
 any street railway without the payment of fare; provided 
 that the company may issue to its employes free tickets 
 for use while engaged in the performance of their duties, 
 and may permit them to ride free when wearing an offi- 
 cial badge of the company conspicuously in view. The 
 company shall keep a record of the number of such free 
 tickets and to whom issued. 
 
 MAIL CARRIERS. 
 
 In the event that the United States Post Office Depart- 
 ment shall pay to the company a sum of money based 
 upon the system of sales of tickets in effect between the 
 postoffice department and the company for the use of 
 letter carriers during the year 1906, the said amount of 
 money to 'be not less than ten thousand, one hundred, 
 thirty-seven dollars and seventy-five cents ($10,137.75) 
 per annum, with proportionate increase in said amount 
 for any increase in the number of letter carriers em- 
 ployed in the city of Chicago over the number of such
 
 276 
 
 carriers so employed in the year 1906, then the company 
 shall carry on its street railways United States letter 
 carriers, in full uniform, at all times, without the pay- 
 ment of fan. 
 
 THROUGH ROUTES. 
 
 Sec. 13. The company will co-operate with any corpor- 
 ation operating the street railway in Halsted street, from 
 O'Neil street north, to operate a through line of cars in 
 said street. Whenever the said city shall so direct and 
 shall grant to the company and to any corporation oper- 
 ating a street railway north of the South Branch of the 
 Chicago river in Western avenue a license or franchise to 
 connect their lines in said avenue, the company shall co- 
 operate with such other corporation to operate a through 
 line of cars in said avenue; also, whenever the said city 
 shall grant to the company and to any corporation oper- 
 ating a street railway north of the South Branch of the 
 Chicago river in Kedzie avenue a license or franchise to 
 connect their lines in said avenue, the company will co- 
 operate with such other corporation to operate a through 
 line of cars in said avenue; and, also, whenever the said 
 city shall grant to the company and to any corporation 
 operating a street railway in Ashland avenue north of 
 the South Branch of the Chicago river a license or fran- 
 chise to connect their lines in said avenue, the company 
 shall co-operate with such other corporation to operate a 
 through line of cars in said avenue; and said corpora- 
 tions shall thereafter operate and maintain said through 
 lines of cars in the said streets and avenues, respectively ; 
 and the company agrees to obtain forthwith the right to 
 operate its cars over the street railways on Kedzie avenue 
 between Thirty-first street and Twenty-second street and 
 on Ashland avenue between Archer avenue and Twenty- 
 second street, from said Chicago General Railway Com-
 
 277 
 
 pany, and to use that right in the establishment of 
 through routes, as in this ordinance provided, so long as 
 any rights of said Chicago General Railway Company in 
 said streets shall continue. But nothing in this ordin- 
 ance contained shall be construed as enlarging or extend- 
 ing any right of said Chicago General Railway Company 
 in or over any of the streets of the city; provided, that 
 the company shall only be required to operate said 
 through lines across or over any river or canal, when 
 the said city or some third party shall provide and main- 
 tain a bridge across the same upon which it may operate 
 its cars. 
 
 The company will co-operate with any corporation or 
 corporations operating such of the street railway lines 
 now operated by the receivers of the Chicago Union Trac- 
 tion Company as may be parts of the through routes in 
 this ordinance or in Exhibit C referred to in establishing 
 and maintaining through lines of cars over the street 
 railway lines of the company and the street railway lines 
 of the Union Traction system entering the south division 
 of the said city, north of Twelfth street, which shall 
 carry passengers from the south division of the said city 
 to the other two divisions of the said city, or in the re- 
 verse directions, through the portion of the south divi- 
 sion of said city north of Twelfth street, for a single fare. 
 
 As many cars shall be operated upon said through lines 
 as the traffic shall require and warrant. 
 
 The parties now concerned have agreed upon certain 
 through routes which are particularly described in Ex- 
 hibit C, which is attached hereto and made a part hereof, 
 with the same force and effect as if herein fully set out. 
 
 The company may establish other through routes from 
 time to time and may discontinue the same, if and when 
 the traffic warrants such establishment or discontinuance;
 
 278 
 
 but no through route specifically established by this or- 
 dinance and said Exhibit C shall be discontinued with- 
 out the consent of the city council of said city, and the 
 city may by ordinance at any time require the company 
 to re-establish any through, route and to establish new 
 and additional through routes whenever the traffic war- 
 rants or requires such establishment or re-establishment; 
 provided, however, that if the company shall consider 
 that the traffic does not in fact warrant or require the 
 establishment or re-establishment of any through route 
 so required by the city to be established or re-established, 
 then in such case it shall be the duty of the Board of 
 Supervising Engineers, upon demand either of the city 
 or of the company to furnish the certificate of said board 
 certifying as to whether or not, in the opinion of said 
 board, the traffic does warrant or require the establish- 
 ment or re-establishment of such through route, and such 
 certificate of the Board of Supervising Engineers shall 
 be prima facie evidence as to w r hether, in fact, the traffic 
 does or does not warrant or require the establishment or 
 re-establishment of such through route; and the obliga- 
 tion of the company in respect to such routes shall be 
 governed by such certificate pending a judicial determin- 
 ation of its obligations in respect to the establishment or 
 re-establishment of any such through route under this 
 ordinance. 
 
 The through routes herein mentioned shall be estab- 
 lished and put in operation immediately after the neces- 
 sary reconstruction of the tracks covered by such routes. 
 
 To carry out the establishment of the through lines 
 provided for in this section, the company will enter into 
 a reasonable operating agreement approved by the said 
 Board of Supervising Engineers, with any other corpor- 
 ation or corporations concerned, whenever required by
 
 279 
 
 the said city. If the company and the corporation or 
 corporations operating the lines of street railway consti- 
 tuting said through routes, or any of them, shall be un- 
 able or fail to agree upon terms as between themselves 
 for establishing, maintaining and operating all of said 
 through routes within sixty (60) days after the passage 
 of this ordinance, then and in such case it shall be the 
 duty of the Board of Supervising Engineers to fix and 
 determine the basis and terms, as between said company 
 and said corporation or corporations, upon which said 
 through routes shall be established, maintained and oper- 
 ated and to notify each of the companies operating the 
 lines of street railway constituting said through routes 
 of said basis and terms, and thereupon it shall be the 
 duty of the company to proceed forthwith to establish, 
 maintain and operate said through routes upon the basis 
 and terms so fixed and determined by said Board of Sup- 
 ervising Engineers. Said companies may by agreement 
 (with the approval of said Board of Supervising En- 
 gineers) modify such basis and terms or they falling to 
 agree, the Board of Supervising Engineers may from 
 time to time modify said basis and terms as to said Board 
 shall seem fit and just. 
 
 Passengers upon the through cars operated upon any 
 through routes, while traveling over the tracks of each 
 company shall be entitled to the same facilities as to 
 transfers as such companies shall be required to give to 
 
 their own passengers paying cash fares. 
 
 
 
 STREET SPRINKLING AND CLEANING. 
 
 Sec. 14. The company shall sprinkle, sweep, keep clean 
 and free from snow that portion of each of the streets oc- 
 cupied by its right-of-way, as provided in Exhibit B, and 
 if it shall be found practicable to have the streets oc-
 
 280 
 
 eupied bj its tracks swept and sprinkled their entire 
 width by the company, or to have street sweepings, gar- 
 bage or other refuse removed by means of street cars at 
 night, the company shall perform said service, or so much 
 thereof as shall prove practicable, when so ordered by 
 the mayor and commissioner of public works, and it 
 shall receive for such service reasonable compensation. 
 In case the company is called upon to remove street 
 sweepings or other refuse, the said city shall furnish suit- 
 able and convenient dumping grounds and permit the 
 connection of the company's tracks therewith. The com- 
 pany shall have the right to carry on suitable cars the 
 snow required by this ordinance to be removed by it, and 
 also, materials for its own use or for the use of the said 
 city, and to connect its tracks and wires with property 
 necessary to be used for such purposes. 
 
 STREET PAVING. 
 
 Sec. 15. The company shall at its own expense fill, 
 grade, pave and keep in repair that portion of the streets 
 occupied by it, as more specifically provided for in said 
 Exhibit B. 
 
 GROOVED RAILS. 
 
 All new tracks 'hereafter laid and all tracks in streets 
 hereafter newly paved or repaved shall be of grooved pat- 
 tern more particularly described in said Exhibit B. 
 
 MAINTENANCE, REPAIRS, RENEWALS AND DEPRECIATION. 
 
 Sec. 16. After the expiration of the three (3) year 
 period of reconstruction and re-equipment, particularly 
 required by the terms of said Exhibit B, under the head- 
 ing of "Immediate Rehabilitation" and until the rights 
 conferred upon the company by this ordinance are ter- 
 minated by the purchase of the said street railway sys- 
 tem by the said city or its licensee or by reason of the
 
 281 
 
 default of the company or otherwise, the company at all 
 times shall maintain the said street railway system and 
 its entire equipment, plant and appurtenances (including 
 pavement and any subways or extensions thereof, to- 
 gether with their appurtenances and equipment, which 
 may be built under the provisions of this ordinance) in 
 first class condition, by making from time to time such 
 expenditures thereon for maintenance, repairs and re- 
 newals, as may be necessary or appropriate to give to the 
 public first class street railway service in all respects. To 
 this end, the company shall make the following expendi- 
 tures : 
 
 (1) The company shall expend for maintenance and 
 repairs during each and every year that the company con- 
 tinues to operate said street railway system after the ex- 
 piration of the said three (3) year period of "Immediate 
 Rehabilitation/' at least a sum equal to six (6) per cent 
 of the gross receipts for the particular year, and if the 
 said amount is not so expended for the said purpose by 
 the company during any one year, then at the end of 
 such year the unexpended portion thereof shall be de- 
 posited in a fund, appropriately designated, with one or 
 more of the banks or trust companies authorized to act 
 as depositaries of such funds, under the terms and sub- 
 ject to the conditions of this ordinance (herein referred 
 to as the depository) for the purpose of being used when- 
 ever necessary for such maintenance and repairs. 
 
 The said depositaries or depositary shall make pay- 
 ment out of said fund upon the order of the company, 
 countersigned by the said Board of Supervising En- 
 gineers. 
 
 (2) On or before the fifth (5th) day of each and 
 every month of each and every year that the company
 
 282 
 
 continues to operate said street railway system after the 
 expiration of said three (3) year period of "Immediate 
 Rehabilitation," the company shall deposit with one or 
 more of the said depositaries in a separate fund, appro- 
 priately designated, a sum equal to eight (8) per cent 
 of the gross receipts of said street railways and property, 
 which shall constitute a reserve fund, for taking care of 
 renewals and depreciation of said street railways and 
 property for the preceding month; and out of the said 
 fund the Board of Supervising Engineers shall from time 
 to time authorize the payment by the company of such 
 amounts as are necessary to pay for renewals of the said 
 street railways and property, the portion of said fund 
 remaining unexpended to continue in said fund as a 
 provision for the depreciation of said street railways and 
 property; and shall be disposed of as hereinafter pro- 
 vided. No payments shall be made by said company out 
 of said fund except on the written certificate of the Board 
 of Supervising Engineers for renewals, which are hereby 
 defined to be the replacement of any principal part of 
 said street railways or of their equipment or appurten- 
 ances; and the Board of Supervising Engineers shall de- 
 termine by classifications made from time to time what 
 particular items of expenditure shall be considered as 
 renewals and what particular items of expenditure shall 
 be considered as maintenance and repairs under the pro- 
 visions of this ordinance. 
 
 The whole or any portion of such reserve fund for 
 maintenance and repairs may be used for maintenance 
 and repairs in addition to the annual expenditure for 
 maintenance and repairs. The fixing of the said amount 
 herein as the minimum amount to be expended annually 
 for maintenance and repairs, and the fixing of the said 
 amount herein as the minimum amount to be deposited
 
 283 
 
 for renewals and depreciation, shall not be held or con- 
 sidered as lessening or limiting in any way the obligation 
 of the company to expend whatever sum or sums may be 
 necessary to be expended for maintenance and repairs 
 and to expend whatever sum or sums may be necessary 
 for renewals, to keep the said street railway system and 
 equipment in first class condition in every respect and at 
 all times. 
 
 The amounts expended or deposited respectively as re- 
 serve funds, under the foregoing provisions of this sec- 
 tion, shall be considered a part of the operating ex- 
 penses of the street railway system hereby authorized, 
 but in the event that the said street railway system shall 
 be purchased by the said city or its licensee at any time 
 under the provisions of this ordinance, the amount then 
 on deposit in each of said reserve funds, or due to be 
 deposited therein at the time of such purchase, shall be 
 turned over to and become the property of the said city 
 or of its said licensee. 
 
 The obligation herein assumed by the company as to 
 the maintenance, repairs and renewals of subways and 
 extensions thereof, shall be held to be confined to that 
 portion of any such subways or extensions, together with 
 the structures and the appurtenances and equipment 
 thereof, which may be used by or be subject to the use 
 of, the said company under the provisions of this ordin- 
 ance, and to its fair proportionate share of the cost of 
 maintenance, repairs and renewals of that part of any 
 such subway or extensions or the appurtenances or equip- 
 ment thereof, which may be used by or be subject to the 
 use of the company jointly with the said city or its 
 licensees or with the said Chicago Railways Company, 
 such proportionate amount to be fixed and determined 
 by the Board of Supervising Engineers.
 
 284 
 
 INSURANCE. 
 
 Sec. 17. The company shall at all times keep insured 
 to its full insurable value, in responsible companies, all 
 buildings, cars and other insurable property, against loss 
 by fire, and the premiums for such insurance shall be 
 paid out of the receipts of said company, as one of the 
 operating expenses thereof, and in case of the destruction 
 or damage by fire of any such property, the company shall 
 restore the same or its substantial equivalent at its own 
 cost and not out of the receipts of its said street rail- 
 ways, or in lieu of such restoration, the company shall 
 deposit, as a part of the reserve fund required by the 
 preceding Section 16, the value of the property so de- 
 stroyed or damaged, which value shall be estimated by 
 the Board of Supervising Engineers. The company shall 
 apply to any such deposit or to the cost of any such rest- 
 oration the insurance moneys received on account of any 
 such loss or damage. If such moneys are not equal in 
 amount to the cost of such restoration or to the amount 
 of the said deposit hereinabove required, the company 
 will at its own cost and not out of the receipts of said 
 street railway system supply any deficit, and if the 
 amount of such insurance moneys is greater than the 
 said cest or deposit, the overplus shall be deposited 
 with and become a part of and be an addition to the fund 
 provided for in the preceding Section 16 for renewals 
 and depreciation. 
 
 PERSONAL INJURY CLAIMS. 
 
 Sec. 18. Out of the gross receipts derived from the 
 operation of the street railway system hereby authorized 
 the company shall pay as a part of the operating expen- 
 ses, all damages arising or growing out of injuries to 
 persons or to the property of others incident to the con- 
 struction, reconstruction or operation of said street rail-
 
 285 
 
 way system accruing subsequent to January 31st, A. D. 
 1907, and the company may set aside as a separate fund 
 such percentage of said gross receipts as the said Board 
 of Supervising Engineers shall estimate to be sufficient 
 to protect the company against all such claims, to the 
 end that if the said city, or its licensee, shall elect to 
 purchase the street railway property of the company as 
 provided by this ordinance, there shall be then available 
 to the company a fund sufficient to meet and discharge 
 all legitimate claims for such damages. The percentage 
 thus reserved may be changed from time to time by said 
 Board of Supervising Engineers if and whenever they 
 shall consider that the percentage theretofore reserved is 
 either inadequate or excessive. 
 
 In case the balance of said fund at any time remaining 
 shall be, in the judgment of the Board of Supervising 
 Engineers, more than sufficient to protect the company 
 against all then unsettled claims, the company shall pay 
 to the said city fifty-five (55$) per cent of the estimated 
 excess, and the company at the same time shall be en- 
 titled to apply to its own use and benefit forty-five (45$) 
 per cent of such estimated excess. 
 
 If the city or its licensee shall purchase the property 
 of the company as in this ordinance provided, the com- 
 pany shall deposit with one or more of the depositaries 
 herein authorized the fund then accumulated under the 
 provisions of this section, together with all of the "net 
 receipts" of the company from the operation of its street 
 railways as shall not have been divided between the com- 
 pany and the city prior to the giving of the notice by 
 the city or its licensee of its intention to purchase, and 
 the company shall assume and pay and save the said city 
 or such licensee harmless from all such claims for dam-
 
 286 
 
 ages, payment for the same to be made out of the fund 
 so deposited, upon the order of the company counter- 
 signed by the said Board of Supervising Engineers; but 
 if the fund so retained and deposited shall be more than 
 sufficient to pay and discharge said claims in full, then 
 the said depositary or depositaries shall pay to the said 
 city (or its licensee, as the case may be) fifty-five (55) 
 per cent of such excess and to the company forty-five 
 (45) per cent of such excess. 
 
 The salaries and expenses of the Board of Supervising 
 Engineers after any such purchase and so long as said 
 board shall continue to act under the provisions of this 
 ordinance shall be paid out of the fund deposited under 
 the provisions of this section. 
 
 REGULATION OF SALARIES. 
 
 Sec. 19. The company may pay to the directors, offi- 
 cers, agents and attorneys of the company as a part of 
 the operating expenses, compensation for their services 
 commensurate with the service actually rendered by them 
 respectively, taking into consideration the compensation 
 paid to directors, officers, agents and attorneys of other 
 corporations or enterprises of similar magnitude and 
 general character for like services, but the said city by 
 written notice thereof may object to the payment there- 
 after of compensation in excess of an amount or rate 
 specified in such objection to any such director, officer, 
 agent or attorney, and in the event of a disagreement be- 
 tween the company and the said city as to the proper 
 amount to be paid as such compensation, the matter shall 
 be submitted to the judgment of the said Board of Sup- 
 ervising Engineers whose decision shall be final and bind- 
 ing upon the parties, except that, if either party shall be 
 dissatisfied with such decision of said board, then such 
 dissatisfied party may make application to any court of
 
 287 
 
 competent jurisdiction to pass upon such objection and to 
 determine the amount of the compensation or salary to 
 be paid. 
 
 EIGHT OF CITY TO PURCHASE AT ANY TIME. 
 
 Sec. 20. The company by the acceptance of this ordin- 
 ance, shall and does grant to the said city, and the said 
 city hereby reserves to itself the right, upon the first 
 day of February or upon the first day of August of each 
 and any year after such acceptance upon giving at least 
 six (6) months' previous notice in writing of its inten- 
 tion so to do, to purchase and take over (but only for 
 municipal operation in case of purchase prior to Feb- 
 ruary first, A. D. 1927), the entire street railway system 
 of the company within the said city, including all prop- 
 erty then existing which now constitutes the said street 
 railway system of the company (except such as is en- 
 umerated in Exhibit D thereto attached), with all renew- 
 als and repairs thereof, and including all the property, 
 franchises, rights and claims described in the appraisal 
 inventory of said street railway system as of June 30th, 
 1906, made by Bion J. Arnold, Mortimer E. Cooley and 
 A. B. du Pont, a copy of which has been filed with the 
 comptroller of the said city on the fourth day of Feb- 
 ruary, A. D. 1907, except such as may have been sold or 
 extinguished as authorized by this ordinance, destroyed 
 or impaired (ordinary wear excepted), and all property 
 then existing which has been purchased or acquired by 
 the company after June 30th, 1906, for use as a part of 
 or in connection with the said system of street railways, 
 the cost of which shall have been certified by the Board 
 of Supervising Engineers, as in this section and in sec- 
 tion 7 hereof provided, and also all extensions of and 
 additions (including underground trolleys, if any) to 
 said street railways made under the provisions of this
 
 288 
 
 ordinance, and all rights of every kind under this ordin- 
 ance in or to any subways or extensions thereof con- 
 structed under the provisions of this ordinance. 
 
 PRICE TE BE PAID BY THE CITY. 
 
 In case the said city shall purchase and take over the 
 street railway system of the company, as in this ordin- 
 ance provided, then it shall pay for the same the aggre- 
 gate of the following items : 
 
 1. The value of the property described in the said ap- 
 praisal inventory and the value of all the franchises, 
 rights and claims of every description, to construct, main- 
 tain or operate street railways in the said city now be- 
 longing to the company, or claimed by it, which said 
 value of such property and all of said franchises, rights 
 and claims is hereby fixed (for the purpose of such 
 purchase) at the sum of twenty-one million dollars ($21,- 
 000,000). 
 
 2. The value of any and all property and equipment 
 and additions thereto supplied, purchased or acquired by 
 said company as a part of its street railway system, be- 
 tween the 30th day of June, A. D. 1906, and February 
 1st, A. D. 1907, including any equipment and additions 
 thereto which were in process on June 30th, 1906, of 
 being so supplied, purchased or acquired, but excluding 
 any property described in the aforesaid inventory, and 
 repairs to and maintenance thereof and any expenditures 
 in connection therewith properly chargeable to operating 
 expenses. From such value shall be deducted the value 
 of any property included in said inventory which shall 
 have been lost, destroyed or impaired (ordinary wear ex- 
 cepted) after the 30th day of June, A. D. 1906, and 
 prior to the 1st day of February, A. D. 1907. The value 
 to be allowed under this paragraph Number 2 of this sec-
 
 289 
 
 tion shall be determined by the Board of Supervising 
 Engineers immediately after the assumption by said 
 board of their duties in supervising the work of recon- 
 struction and re-equipment in this ordinance provided 
 for, and shall be reported by said board to the city con- 
 troller of said city; and the amount so reported by said 
 board shall be final and binding upon the parties hereto 
 and shall be conclusively held and taken as the value of 
 the property and equipment in this paragraph specified. 
 
 3. The cost of reconstruction and re-equipment of said 
 street railway lines of the company and of the construc- 
 tion of new lines, extensions, underground trolleys and 
 other additions to property actually paid by said com- 
 pany at and prior to said purchase by said city and certi- 
 fied by the Board of Supervising Engineers, or incurred 
 for work actually done or materials furnished with the 
 approval of said board under completed or pending con- 
 tracts, except those for which special provision is made 
 in subdivision 4 of this section, together with the per- 
 centages thereon as in section 7 hereof provided, and all 
 amounts which shall then have been contributed by the 
 company to the city for the construction of subways or 
 extensions thereof, together with five (5) per cent of said 
 last named amounts as hereinbefore provided. 
 
 4. After the giving of the notice of the election of the 
 said city to purchase said street railway system of the 
 company, as herein provided, and prior to the date fixed 
 for said purchase, the said Board of Supervising En- 
 gineers shall make a written estimate (and furnish a 
 copy thereof to the said company and the said city) 
 of the probable cost of completing any work of construc- 
 tion or equipment provided for by this ordinance, includ- 
 ing the construction of new lines, extensions, underground
 
 290 
 
 trolleys or other additions to property and including any 
 extensions of the street railway system of said company 
 made under the provisions of section 36 hereof, which 
 work has, and to the extent to which it has, prior to the 
 date of giving said notice, been contracted for by the said 
 company, with the approval of said Board of Supervising 
 Engineers, and the city shall either take over and as- 
 sume said contracts and procure the release of the com- 
 pany from all obligation thereunder, or the said city 
 shall, at or prior to the date of the said purchase of the 
 street railway system of said company, deposit with a 
 depositary or depositaries (authorized to act as such by 
 this ordinance) a sufficient amount of money to pay the 
 cost of completing such contracts according to the said 
 estimate of the said Board of Supervising Engineers, and 
 the said company shall proceed, with all due diligence 
 and care, to complete said contracts at its own expense 
 and under the supervision of said Board of Supersiving 
 Engineers, and the cost of completing the said contracts 
 after the date of such purchase by the city, together with 
 the said additional percentages thereof, shall be paid 
 from time to time by the said depositary or depositaries 
 out of the funds so deposited, upon the written certificates 
 of the said Board of Supervising Engineers. In the 
 event that the said amount so deposited shall not be suffi- 
 cient to pay the said cost, including said additional per- 
 centages provided for in Section 7 hereof, the said city 
 shall pay such additional amount as may be necessary 
 for such purpose, and in the event that the amount 
 so deposited shall be. more than sufficient to pay the said 
 cost, the unexpended balance shall be returned and paid 
 over to the city by the said depositary or depositaries 
 holding the same, and in no event shall the company be 
 obligated to incur a greater expense in carrying out said 
 contract than the amount so deposited.
 
 291 
 
 PAYMENT OR DEPOSIT OF PURCHASE PRICE. 
 
 Upon the deposit of the sum, if any, required by the 
 above and foregoing paragraph numbered 4 of this sec- 
 tion and the payment in cash of the amounts hereinbe- 
 fore in paragraphs numbered 1, 2 and 3 of this section 
 provided for, to the company, or the deposit of said 
 amounts to the order of the company with one or more 
 of the depositaries authorized to act as such by this or- 
 dinance the said city shall have full right and lawful 
 authority, after the notice and upon any of the dates 
 hereinbefore fixed, to take over and possess, as its own 
 property, all the property, plant and equipment of every 
 sort and nature (including underground trolleys), then 
 constituting the street railway system of the company, 
 and all rights of every kind under this ordinance in or to 
 any subways or extensions thereof constructed under 
 the provisions of this ordinance, free and clear of all 
 liens and claims of every nature, except that the said 
 city shall take subject to the payment of a fractional 
 part of the unpaid taxes for the current year upon the 
 said property, rights and equipment, equal to the frac- 
 tional part of the year for which such taxes have been 
 levied or assessed remaining unexpired at the date of 
 such purchase, and the balance of the taxes shall be 
 treated and paid as a part of the operating expenses prior 
 to the sale of the property. 
 
 The company further grants to the said city, and the 
 said city hereby reserves to itself, the right (in addition 
 to the right of purchase hereinbefore granted and re- 
 served) to purchase and take over from the company at 
 any time prior to February first, 1927, the street railway 
 system, rights and property of the company, free from 
 any limitation and restriction as to the operation thereof, 
 at the same times and in the same manner at and upon
 
 292 
 
 which the city has the right under the foregoing provi- 
 sions of this section to purchase the same. The price to 
 be paid therefor by the city under the right of purchase 
 in this paragraph granted and reserved shall be the price 
 at which the city shall then have the right to purchase 
 said property for municipal operation as hereinbefore 
 specified, and in addition to such price a sum equal to 
 twenty (20) per cent of such price. 
 
 The property to the possession of which the said city 
 shall then be entitled shall include all of the property 
 then existing which constitutes the street railway system 
 of the company and its appurtenances at the date of the 
 passage of this ordinance (excepting property enumer- 
 ated in said Exhibit D) and all of the property purchased 
 or acquired thereafter by the company, and all extensions 
 of, or additions to, said street railways, including under- 
 ground trolleys constructed under the provisions of this 
 ordinance, and all rights of the said company in or to 
 any subways or extensions thereof constructed under this 
 ordinance, and the sum then on deposit as a reserve fund, 
 under the provisions of section 16 of this ordinance, ex- 
 cepting such property as may have been sold as in this 
 ordinance authorized, or worn out or destroyed, provided 
 that in case of property destroyed and not then replaced 
 in kind or in value as provided in section 17 of this or- 
 dinance, adjustment shall forthwith be made at the time 
 of such purchase and the obligation of the company in 
 that behalf discharged either in cash or by deduction from 
 the purchase price. 
 
 In the event that it shall be determined that the city 
 is, at the time this ordinance is passed or at the time 
 this ordinance takes effect, without lawful power or 
 authority to acquire or own street railways under the 
 provisions of this ordinance or otherwise, and the city
 
 293 
 
 shall thereafter acquire such power or authority, there- 
 upon and after such acquirement the city shall have the 
 right to purchase and acquire said street railways, rights 
 and property under the provisions of this ordinance to 
 the same extent and in the same measure as if said city 
 had full right and lawful authority so to purchase or 
 acquire said street railways, rights and property at the 
 date of the passage of this ordinance and at the date 
 when this ordinance takes effect. 
 
 CITY PURCHASE DURING RECONSTRUCTION PERIOD. 
 
 Sec. 21. In the event that the said city shall elect to 
 exercise its right of purchase, as in this ordinance pro- 
 vided, at any time prior to the completion of the work 
 of construction, reconstruction, equipment and re-equip- 
 ment within the time and in the manner provided for in 
 said Exhibit B, under the head of "Immediate Rehabilita- 
 tion" it shall take over the same subject to the right and 
 obligation of the company to complete the said work of 
 "Immediate Rehabilitation" as provided in this ordin- 
 ance, carrying out the terms and conditions of said Ex- 
 hibit B under the supervision and control of the said 
 Board of Supervising Engineers and receiving therefor 
 the cost thereof and the additional percentages thereon 
 as in section 7 of this ordinance provided. 
 
 In such event in addition to complying with the pro- 
 visions of section 20 hereof the said city shall deposit at 
 the time of such purchase with some one or more of the 
 banks or trust companies authorized to act as deposi- 
 taries under the terms of this ordinance a sufficient 
 amount of money to pay for the completion of the said 
 work of "Immediate Rehabilitation," not herein other- 
 wise provided for, which said amount shall be estimated 
 and determined by the said Board of Supervising En-
 
 294 
 
 gineers, and shall include said additional percentages pro- 
 vided for in section 7 hereof. 
 
 The said cost of completing the said work of "Imme- 
 diate ^Rehabilitation," together with said additional per- 
 centages thereof shall be paid from time to time by the 
 said depositary or depositaries, out of the funds so de- 
 posited with it or them, upon the written certificates of 
 the said Board of Supervising Engineers. 
 
 In the event that the said amount so deposited shall 
 not be sufficient to pay the said cost, including said addi- 
 tional percentages provided for in section 7 hereof, the 
 said city shall pay such additional amount as may be 
 necessary for such purpose. 
 
 In the event that the amount so deposited shall be 
 more than sufficient to pay the said cost, the unexpended 
 balance shall be returned and paid over to the said city 
 by the said depositary or depositaries, and in no event 
 shall the company be obligated to incur a greater expense 
 for the work of such construction, reconstruction, equip- 
 ment and re-equipment, including underground trolleys 
 and other additions to plant and property, if any, than 
 the amount so deposited. 
 
 RIGHT OF LICENSEE TO PURCHASE. 
 
 Sec. 22. The company by the acceptance of this ordi- 
 nance snail and does grant to the city, and the city hereby 
 reserves to itself, the right to designate any person, firm 
 or corporation having lawful authority to acquire, own 
 and operate street railways in said city (herein called the 
 "licensee") who or which shall have the right to purchase 
 the street railway system, rights and property of the com- 
 pany, at the same times and in the same manner at and 
 upon which the city hereunder has the right to purchase 
 the same, subject to the condition that the said licensee 
 shall purchase the same property which the city has here-
 
 295 
 
 in reserved the right to purchase, and that tlje price to be 
 paid therefor by the said licensee shall be the price at 
 which the city shall have the right to purchase said prop- 
 erty for municipal operation, and in addition to such price 
 a sum equal to twenty (20) per cent of such price; but it 
 is expressly provided, however, that the said licensee shall 
 not be required to pay the said additional twenty (20) 
 per cent or any part thereof, if, before the purchase of 
 said property by such licensee shall be consummated, a 
 valid and binding contract shall be entered into between 
 the city and its licensee, either by the passage of an ordi- 
 nance and the acceptance thereof or otherwise, which 
 shall limit the beneficial interest of the said licensee (and 
 its stokholders, if such licensee is a corporation) in the 
 property purchased and any improvements thereof or 
 additions thereto to a return of the actual moneys in- 
 vested therein by said licensee and not exceeding five 
 (5) per cent thereof, in addition thereto, and interest 
 upon the said moneys and the said additional per cent at 
 a rate not exceeding five (5) per cent per annum, and 
 which shall provide that all net profits derived from the 
 said property in excess of the beneficial interest of said 
 licensee, limited as aforesaid, shall belong and be paid 
 over to the city. 
 
 Nothing in this ordinance, however, shall have the effect 
 or be construed to have the effect of lessening or limiting 
 the right of the city to provide for reducing the rates of 
 fare to be charged by such licensee in the operation of 
 said street railway system or from using the moneys so to 
 be paid over to the said city by said licensee for the pur- 
 pose of retiring from time to time the stock or other se- 
 curities issued by said licensee, subject to the limitations 
 of this section, or from using the said moneys in extend- 
 ing or adding to or improving said street railway system. 
 
 The right of the licensee of the city to acquire the said
 
 296 
 
 street railway system rights and property by purchase 
 under the provisions of this ordinance shall in no way 
 be impaired by any lack of power or authority on the part 
 of the city itself to acquire the said street railway system, 
 rights and property for municipal use and operation or 
 otherwise. 
 
 Upon the purchase of the said street railway system, 
 rights and property under the provisions of this ordinance, 
 either by the city or by any licensee of the city, all rights, 
 of the company, its licensees or assigns under this ordi- 
 nance in or to said street railways, rights and property 
 or any part thereof, or the operation thereof, or receipts 
 thereof, shall wholly cease and determine. 
 
 BIGHTS OP COMPANY IN CASE CITY DOES NOT PURCHASE FOB 
 TWENTY YEABS. 
 
 Sec. 23. In the event that the said street railways are 
 not purchased by the said city or its licensee as herein- 
 above authorized, prior to February first, A. D. 1927 (and 
 nothing in this ordinance contained shall be construed as 
 being in any event a grant to the company extending 
 beyond February first, 1927), the said city shall have the 
 right to designate any person, firm or corporation having 
 lawful authority to acquire, own and operate street rail- 
 ways in said city as its licensee, to purchase the said 
 street railways, property and rights of the company at or 
 after February first, 1927, upon the same terms that the 
 city could then purchase, and in case such reserved right 
 of purchase be not exercised by the said city or its licensee 
 and the city shall grant a right to another company to 
 operate a street railway in the streets and parts of streets 
 constituting the said street railway system of the com- 
 pany, such new company shall be required to and shall 
 purchase and take over the said street railways, property 
 and rights of the company at or after February first,
 
 297 
 
 19*27, upon the same terms upon which the said city might 
 then purchase and take them over. 
 
 No mortgage, trust deed or other instrument given by 
 the company shall impose any lien upon or create any 
 rights in the said street railways, property and rights, 
 without the same being made specifically subject to all the 
 limitations, conditions and provisions of this ordinance, 
 including the right of the said city or its licensee to ac- 
 quire the said property and rights upon the terms and in 
 the manner in this ordinance provided, and in the event 
 of such purchase the lien of any such mortgage, trust 
 deed or other encumbrance, and all other liens upon said 
 street railways, property and rights, or any part thereof, 
 shall be discharged from said street railways, property 
 and rights and shall attach to the proceeds of the sale 
 thereof. 
 
 INTEREST RETURN OF CAPITAL INVESTMENT. 
 
 Sec. 24. On or before the tenth day of April in each 
 year the company shall come to an accounting and settle- 
 ment with the said city as of the thirty-first day of Janu- 
 ary last preceding, upon the following basis: 
 
 From the gross receipts of the said street railway sys- 
 tem and property from all sources and of every kind for 
 the year ending on said thirty-first day of January there 
 shall be deducted for such year: 
 
 First: (1) All expenses of operation, including main- 
 tenance, repairs and renewals; (2) All amounts contrib- 
 uted during said year and then held in reserve under the 
 provisions of Sections 16 and 18 hereof; (3) All amounts 
 paid out for taxes and assessments levied and imposed 
 upon the real and personal property of the company, in- 
 cluding all capital stock or franchise taxes levied or as- 
 sessed after the 31st day of January, 1907, but not includ- 
 ing any taxes which may by any court be ordered to be 
 levied, assessed or collected after the 31st day of January,
 
 298 
 
 1907, on account of the failure of the company or any per- 
 son, firm or corporation owning or having an interest in 
 the said street railways or property, to pay any taxes 
 which should have been paid for or on account of such 
 street railways or property prior to the 31st day of Janu- 
 ary, 1907, and not including any sums paid by the com- 
 pany to the city for city license fees, if any, exacted from 
 the company or its employes; (4) All salaries and ex- 
 penses of the Board of Supervising Engineers by this ordi- 
 nance authorized, after the period of "Immediate Rehab- 
 ilitation"; and 
 
 Second: A sum equivalent to five (5) per centum per 
 annum for said preceding year upon the amount of the 
 cash purchase price which the said city would then be 
 obligated to pay on account of the items specified in sub- 
 divisions 1, 2 and 3 of Section 20 hereof, if it were pur- 
 chasing the property for municipal operation on such 
 thirty-first day of January, interest being adjusted as to 
 items added to such purchase price during said year. In 
 case in any year the gross receipts shall not be sufficient 
 to pay in full the items in the "first" and "second" para- 
 graphs of this section mentioned, then the deficit shall be 
 paid out of the gross receipts of the subsequent year or 
 years. 
 
 DIVISION OF REMAINING NET RECEIPTS. 
 
 After the deduction from the gross receipts of the items 
 hereinbefore in this section provided, the amount remain- 
 ing shall be considered as the net receipts for such year 
 arising from the operation of the street railway system 
 hereby authorized, and shall be divided between the com- 
 pany and the said city in the following proportions : forty- 
 five (45) per cent to be retained by the company, and 
 fifty-five (55) per cent to be paid forthwith by the com- 
 pany to the said city, crediting thereon all amounts paid 
 out during the preceding year by the company for city
 
 299 
 
 license fees, if any, exacted from the company or its em- 
 ployes. 
 
 COMMUTATION OF FARES. 
 
 It is understood and agreed that the company's agree- 
 ment and obligation to pay to the city the fifty-five (55) 
 per cent of the "net receipts," as hereinbefore provided is 
 based upon its right to charge and receive the fares pre- 
 scribed in Section 11 hereof and to retain as its own 
 the forty-five (45) per cent of the "net receipts'' as is 
 hereinabove in this section provided. The said city, how- 
 ever, reserves the right to, and it may at any time com- 
 mute a sum not exceeding the city's share of the net re- 
 ceipts for the previous year into a reduction of said rates 
 of fare; and thereafter in the event of such reduction of 
 rates of fare the company may deduct and retain as its 
 share of the net receipts each year an amount equal to 
 what would have been the company's share of the net re- 
 ceipts of such year had the passengers earned during such 
 year paid the fares prescribed in this ordinance, but the 
 company, after deducting and retaining its share of said 
 net receipts so determined shall pay over to the said city 
 the remainder, if any, of the net receipts for such year 
 less the deductions therefrom hereinbefore provided to be 
 made from the said city's share of the "net receipts" on 
 account of license fees. 
 
 CITY TO ESTABLISH SINKING FUND FOR MUNICIPAL 
 PURCHASE. 
 
 It is further provided that, subject to the action of the 
 City Council of said city, the said city shall deposit the 
 amount so paid to the said city to the credit of a separate 
 fund to be kept and used for the purchase and construc- 
 tion of street railways by said city; but any failure to 
 comply with this provision shall in no way affect the 
 rights or obligations of the company under this ordinance.
 
 300 
 
 CAPITAL INVESTMENT LIMITATION. 
 
 Sec. 25. The company shall not be required on account 
 of any extensions of subways or on account of under- 
 ground trolleys, or on account of any extensions of its 
 street railways, other than the extensions provided for in 
 Exhibit A, and in Section 36 of this ordinance, and four 
 (4) miles of double or eight (8) miles of single track per 
 annum, as in Section 3 hereof provided, to increase its 
 total capital investment to such an extent that the return 
 thereon over and above the interest charge of five per cent 
 thereon by this ordinance authorised, would be reduced to 
 an inadequate or unreasonably small amount. 
 
 DEPOSITARIES. 
 
 Sec. 26. Any state or national bank or trust company 
 in the city of Chicago or in the city of New York which 
 has a capital stock and surplus amounting to at least one 
 million dollars ($1,000,000) may be selected and can act 
 as a depositary under the provisions of this ordinance, 
 provided, that no moneys shall be deposited with any 
 such depositary under the provisions of this ordinance to 
 an amount exceeding the total capital stock and one-half 
 of the surplus of such depositary; and provided further 
 that all deposits authorized or required by this ordinance 
 (except deposits of purchase money in the event of pur- 
 chase of said street railway system by the city, or its 
 licensee) shall be made with depositaries in the city of 
 
 Chicago. 
 
 DEPOSITS. 
 
 Sec. 27. The company shall have the right to select 
 the particular depositary or depositaries with which it 
 shall deposit any of the funds required to be deposited by 
 the company under the provisions of this ordinance, and 
 the company shall at all times be held responsible for any 
 loss or impairment of any such deposit, and shall prompt- 
 ly make good and restore at its own cost, and not. out of
 
 301 
 
 the receipts of said street railways, any such loss or im- 
 pairment. The city or its licensee, as the case may be, 
 shall have the right to select the particular depositary or 
 depositaries with which shall be deposited the funds re- 
 quired to be deposited by the city or its licensee, in the 
 event of purchase of the said street railways by the city 
 or its licensee under the provisions of this ordinance, and 
 the city or its licensee, as the case may be, shall at all 
 times be held responsible for any loss or impairment of 
 any such deposit made by it, and shall promptly make 
 good and restore any such loss or impairment. 
 
 Provided, that in all cases where, under the terms of 
 this ordinance, the city is authorized or required to make 
 any deposits of money, the city shall be free from any 
 responsibility for loss or impairment of any such deposit, 
 if not less than thirty days prior to the making of such 
 deposit it shall give notice in writing to the company of 
 the names of the depositaries in which it shall propose to 
 make such deposit. And the company, if not satisfied 
 therewith, shall give notice in writing to the city not less 
 than twenty days after receiving such notice from the 
 city. The notice of the company may direct the city not 
 to make such deposit, or any specified portion of it, with 
 any depositary or depositaries so named by the city of 
 which the company may disapprove, and in such case 
 such notice 'by the company shall contain the names of 
 qualified depositaries from which the city may choose in 
 lieu of the names so disapproved of by the company, and 
 the number of the names of depositaries in such notice 
 by the company, from which the city is to choose, shall 
 be at least five in excess of the number of depositaries 
 which the company shall disapprove of as stated in such 
 notice. And the city, upon making deposits, in accord- 
 ance with the terms of this proviso, shall be free from any 
 responsibility for loss or impairment of any such deposits.
 
 302 
 
 INTEREST ON DEPOSITS. 
 
 Sec. 28. Appropriate provision for the payment of 
 reasonable interest on any funds deposited under the pro- 
 visions of this ordinance shall be made with the deposi- 
 tary or depositaries of such funds by the party making 
 such deposit. All interest which may accrue upon or be 
 payable on account of any funds deposited under the pro- 
 visions of this ordinance and any commission or allow- 
 ance made directly or indirectly by any depositary on 
 account of the funds deposited with it shall be held and 
 considered as a part of the principal fund so deposited 
 and shall be added to such fund as a part thereof. 
 
 The company shall make daily deposits, with some de- 
 positary or depositaries authorized by this ordinance, of 
 all moneys received by the company from the operation 
 of the said street railways and property, and shall make 
 appropriate provision for the payment of reasonable in- 
 terest on the moneys so deposited by such depositary or 
 depositaries, which interest shall be added to and be held 
 and considered as a part of the gross receipts of the said 
 street railway system and property. 
 
 ANNUAL REPORTS. 
 
 Sec. 29. The company, so long as it continues to oper- 
 ate any of the said street railways under this ordinance, 
 and on or before the tenth day of April in each year shall 
 prepare and file with the city comptroller of said city 
 annual reports for the preceding year ending on the 31st 
 day of January. 
 
 Such reports shall be in writing, verified by the affi- 
 davit of the auditor of the company, setting forth in rea- 
 sonable detail according to forms prescribed by said comp- 
 troller, the character and amount of business done by the 
 company for the year immediately preceding such report 
 and the amount of receipts from and the expenses of con- 
 ducting the said business, and the said city comptroller,
 
 303 
 
 or accountants authorized by him, under the direction of 
 the mayor or city council of said city, shall have the 
 right at all reasonable times to examine all the books, 
 vouchers and records of the receipts and expenditures of 
 the company, for the purpose of ascertaining the accuracy 
 
 of the reports herein required and the rights of the said 
 city under this ordinance. The Board of Supervising 
 Engineers shall have the power to prescribe the form and 
 manner in which the books and accounts of the company 
 shall be kept subject to the approval of the city comp- 
 troller. There shall be also an annual audit of the ac- 
 counts of the company covering all receipts and expendi- 
 tures for the year ending on the thirty-first day of Jan- 
 uary next preceding, and a formal written report by pub- 
 lic accountants selected by the city and the company, the 
 expenses of such audit and report to be paid out of the 
 gross receipts of the company as an operating expense. 
 
 In the event of any purchase of the street railways and 
 property of the company under the provisions of this ordi- 
 nance, on the first, day of August of any year, there shall 
 be an accounting and report for the preceding six months 
 similar in character to that hereinbefore provided. 
 
 COMPANY TO MAINTAIN OFFICE IN CITY. 
 
 Sec. 30. The company shall not remove its principal 
 office or any of its books (except bond registry and stock 
 transfer books), records, accounts, contracts, or original 
 vouchers of receipts and expenditures beyond the limits 
 of the said city, and shall maintain an office within said 
 city so long as the company continues to operate any part 
 of the street railways mentioned and provided for in this 
 ordinance under the provisions hereof. 
 
 FORFEITURE FOR NON-COM I'l-I A NVK. 
 
 Sec. 31. The company, by the acceptance of this ordi- 
 nance, expressly agrees with the said city and
 
 304 
 
 itself fully to comply with all of the terms and conditions 
 of this ordinance throughout the period of time covered 
 hereby, and so long as the company continues to operate 
 any street railways in said city under or by virtue of the 
 authority hereof. 
 
 The company further agrees that in the event that it 
 shall make default in the observance or performance of 
 any of the agreements or conditions herein required to be 
 kept and performed by it, and if any such default shall 
 continue for a period of three (3) months (exclusive of 
 all times during which the company may be delayed or 
 interfered with, without its connivance, by unavoidable 
 accidents', labor strikes or the orders or judgments of 
 any court entered in any suit brought without its con- 
 nivance), after written notice thereof to it from the said 
 city, then and in each and every such case, the said city 
 by its city council shall be entitled to declare this grant 
 and all of the rights and privileges of the company to 
 maintain and operate street railways in any of the streets 
 or public ways of the said city to be forfeited and at an 
 end; provided, however, that should the company, for its 
 corporate purposes, pledge or mortgage its street railway 
 property or any of the rights secured to it by this ordi- 
 nance, or any security representing the said property or 
 rights, for the security of the payment of its notes, bonds 
 or other evidences of indebtedness maturing on or before 
 February first, 1927, the amount thereof not being in ex- 
 cess of the value of the property and rights of the com- 
 pany, as defined in Section 20 hereof, such right of for- 
 feiture of this grant by reason of any violation by the 
 company of the provisions of this ordinance shall not be 
 asserted or exist against such pledgee or pledgees, mort- 
 gagee or mortgagees, or any of them, and shall not impair 
 or affect the right of such pledgee or pledgees, mortgagee
 
 305 
 
 or mortgagees, to recover by foreclosure or other legal 
 process against all the property of the company, includ- 
 ing the rights and privileges hereby granted, the face 
 value of said, notes, bonds or other evidences of indebted- 
 ness, or any security representing the said property or 
 rights to an amount, however, not in excess of the sum 
 for which the city would then have the right under the 
 terms of this ordinance to purchase the said street rail- 
 way property; and it is hereby stipulated that any notice 
 of default by the company, upon which a forfeiture shall 
 be claimed, shall also be given by the said city to the trus- 
 tee or mortgagee of record in any trust, deed or mortgage 
 securing such indebtedness. The purchaser at any fore- 
 closure or other sale shall acquire no other or greater 
 rights or privileges than are hereby conferred, and such 
 purchaser shall hold said property, so purchased at such 
 foreclosure or other sale, subject to the right of purchase 
 at any time thereafter, as herein provided, by the said 
 city, and also subject to the right of purchase by any 
 licensee of the said city, upon the same terms as the said 
 city might purchase and acquire said property for munici- 
 pal operation, but without payment in either case of the 
 additional twenty (20) per cent provided for in sections 
 20 and 22 of this ordinance; and also subject to the con- 
 tinuing terms, conditions and limitations of this ordi- 
 nance, including the forfeiture provisions to the same 
 extent as if the said purchaser had been the original 
 grantee hereunder, except that such purchaser shall have 
 no right to execute or deliver any mortgage, trust deed 
 or other encumbrance on said street railways, rights and 
 property or any part thereof without the consent of said 
 city. 
 
 The city shall have the right to bid and become the 
 purchaser at any such foreclosure or other sale.
 
 306 
 
 The said company further expressly agrees that, by 
 the acceptance by it of this ordinance, it is obligated to 
 complete the said work of "Immediate Rehabilitation" 
 provided for in said "Exhibit B" within the time and in 
 the manner set forth in said exhibit (due allowance being 
 made for any and all delays or interruptions arising with- 
 out its connivance by unavoidable accidents, labor strikes, 
 or the orders or judgments of any court, entered in any 
 suit brought without its connivance), and if the company 
 shall fail or neglect to proceed with the said work of 
 "Immediate rehabilitation" with all reasonable diligence 
 and promptness after the acceptance of this ordinance by 
 the company, or to complete the said work within the 
 time prescribed in said Exhibit, B, and said Board of 
 Supervising Engineers shall certify to the City Council 
 of the said city that the company has failed or neglected 
 to so proceed with said work, or has failed or neglected 
 to complete the work in the time specified in Exhibit B, 
 the company shall be and is obligated to pay to the said 
 city for each day that such default or neglect shall con- 
 tinue, the sum of ten thousand dollars as liquidated dam- 
 ages; and if the company shall, at any time after the ac- 
 ceptance of this ordinance by it, fail to comply with the 
 provisions hereof with regard to the maintenance of first 
 class street railway service over and upon its said lines 
 of street railways, the said city shall have the right to sue 
 for and recover in any court of competent jurisdiction the 
 sum of not less than fifty dollars and not more than five 
 hundred dollars for each and every such failure and each 
 and every day that such failure shall continue shall be 
 taken and held to be a separate offense; but the payment 
 of such penalties shall not in any manner release the lia- 
 bility of the company to incur a forfeiture of all its rights 
 and privileges under this ordinance, as hereinabove in 
 this section provided.
 
 307 
 
 WAIVER OF RIGHTS. 
 
 Sec. 32. The company, in consideration of the grant 
 made by this ordinance, upon the terms and conditions 
 herein expressed, agrees to waive, surrender and release, 
 and by the acceptance of this ordinance, the company does 
 waive, surrender and release all and every one of tlie 
 rights and claims of the company of every kind and na- 
 ture, in the streets of the said city, other than the rights 
 granted by this ordinance. 
 
 CITY'S RIGHT TO INTERVENE. 
 
 Sec. 33. The company 'by the acceptance of this ordi- 
 nance shall and does grant to the said city, and the said 
 city hereby reserves to itself the right to intervene in any 
 suit or proceeding brought by any person, firm or cor- 
 poration seeking to enjoin, restrain or in any manner in- 
 terfere with the company in the doing of any work called 
 for by this ordinance, or involving the observance or per- 
 formance of any of the agreements or conditions herein 
 provided to be kept or performed by the company, or in 
 any suit to foreclose or enforce any lien, mortgage or 
 trust deed against it and to move for a dissolution of such 
 injunction or restraining order in such suit, and take any 
 other appropriate steps to protect the rights of the said 
 city in case it shall deem action necessary and appropri- 
 ate to protect the interests of the said city. 
 
 BOARD OP SUPERVISING ENGINEERS. 
 
 Sec. 34. Immediately upon the acceptance of this or- 
 dinance by the company, there shall be organized a Board 
 of Supervising Engineers in the manner following: 
 
 Within thirty (30) days after the acceptance of this 
 ordinance as hereinafter provided, the company shall ap- 
 point an engineer to represent it on said board, and shall 
 notify the mayor of said city, in writing, of the name 
 and address of such engineer; and within thirty (30)
 
 308 
 
 days after such notice the said city shall appoint an engi- 
 neer as its representative on said board (which appoint- 
 ment shall be made by the mayor of the said city and 
 shall be subject to the approval of the city council), and 
 shall notify the company in writing of the name and ad- 
 dress of its said engineer. 
 
 Bion J. Arnold is hereby selected and appointed the 
 third member of the said board. The said city or the 
 company may respectively, at any time and from time to 
 time, remove its representative on said board, and may 
 also respectively from time to time, appoint an engineer 
 to represent it upon said board, whenever and as often 
 as it shall fail to have a representative upon said board 
 from any cause whatsoever. No such removal or appoint- 
 ment shall take effect until written notice thereof has 
 been given to the other party by the party making such 
 removal or appointment. 
 
 The said city and the company may, at any time and 
 from time to time, remove the third engineer from said 
 board, and may also select and appoint a third engineer 
 to be a member of said board, whenever and as often as a 
 vacancy in said board shall occur from the death, resigna- 
 tion, removal, refusal or inability to act of the third engi- 
 neer upon said board. 
 
 In the event that any vacancy in the position of third 
 engineer upon said board shall not be filled by the selec- 
 tion of a third engineer by said city and the company 
 within thirty (30) days after such vacancy shall arise, 
 then the persons then acting as judges 1 of the (main) 
 Appellate Court for the First District of Illinois, or a 
 majority of them, may fill such vacancy on said board by 
 appointing a competent engineer thereto upon the appli- 
 cation of said city or the company, after ten days' writ- 
 ten notice having been given to the other party of such 
 application.
 
 309 
 
 In case either the said city or the company shall at any 
 time desire the removal of the third engineer and the ap- 
 pointment of another engineer in his place, the party de- 
 siring such removal and new appointment may, upon giv- 
 ing ten (10) days' written notice thereof to the other 
 party, apply to the said judges for such removal, and the 
 said judges or a majority of them shall within ten (10) 
 days from and after such application set the same for in- 
 formal and summary public hearing, at which the party 
 desiring the removal shall publicly present its reasons for 
 asking such removal. 
 
 Upon such application of either the said city or the 
 company, the said judges or a majority of them shall 
 have the power, but shall not be required to remove the 
 said third engineer. The third engineer shall not be re- 
 moved by the said judges or a majority of them at. any 
 time, except upon the application of either the said city 
 or the company. 
 
 Upon the refusal or failure of the said judges then con- 
 stituting the (main) Appellate Court for the First Dis- 
 trict of Illinois, or a majority of them, to make the ap- 
 pointment herein authorized within thirty (30) days 
 after being requested so to do, either the said city or the 
 company may, upon giving ten (10) days' written notice 
 to the other party of its intention so to do, apply to any 
 judge of the Circuit Court of Cook County, Illinois, for 
 the appointment of a third engineer to fill any vacancy 
 existing in said position, and the judge so applied to shall 
 have the power to appoint such third engineer, who, when 
 appointed, shall be a member of said board, and shall be 
 subject to removal in the manner hereinabove provided. 
 
 Either the company or the city shall have the right to 
 apply to any court of competent jurisdiction for the re- 
 moval of any member of said Board of Supervising Engi-
 
 310 
 
 neers for fraud, corruption, or failure to perform in good 
 faith his duties under this ordinance. 
 
 A majority of said Board of Supervising Engineers 
 shall at all times be authorized to exercise the powers con- 
 ferred by this ordinance on said board. 
 
 All words in this ordinance contained purporting to 
 give authority to said Board of Supervising Engineers 
 shall be construed as giving such authority to a majority 
 of said board. 
 
 SALARIES AND EXPENSES OF SAID BOARD. 
 
 The said Board of Supervising Engineers shall main- 
 tain an office in the said city and shall employ the neces- 
 sary assistance and purchase the necessary supplies and 
 materials to enable it properly to perform its duties under 
 this ordinance. 
 
 The said third engineer shall be ex-officio chairman of 
 the board, and shall be paid for his services as a member 
 of said board compensation at the rate of fifteen thousand 
 dollars ($15,000.00) per annum. 
 
 During the period of "Immediate ^Rehabilitation," said 
 Bion J. Arnold, so long as he continues to act as a mem- 
 ber of said board, shall, in addition to his duties as a 
 member of said Board of Supervising Engineers, act as 
 chief engineer of the work contemplated in this ordinance, 
 and shall receive as additional compensation for such 
 service, the sum of fifteen thousand dollars ($15,000.00) 
 per annum. In such capacity he shall have charge of the 
 preparation of the plans and specifications, and the gen- 
 eral direction of the entire work, and of its inspection 
 during construction. Said plans and specifications and 
 system of inspection shall be subject to the approval of 
 the Board of Supervising Engineers. 
 
 Each of the other two members of said board shall, in 
 addition to attending the monthly meetings of the board, 
 attend such other meetings as may be called by the chair-
 
 311 
 
 man, and be paid for his services as a member of said 
 board, compensation at the rate of one hundred dollars 
 (f 100. 00) per day, and his traveling and living expenses 
 while away from his home, and actually engaged upon 
 this work, it being understood that his total compensa- 
 tion for services shall not be less than thirty-six hundred 
 dollars ($3,600.00) nor more than ten thousand dollars 
 ($10,000.00) per year. The chairman of said board shall 
 call (in addition to such meetings as he may deem de- 
 sirable or necessary) a meeting of said board at any time 
 upon request of the president of either of said companies, 
 or the mayor of said city. 
 
 The salaries and expenses of said Board of Supervising 
 Engineers during the period of "Immediate Rehabilita- 
 tion" provided for in this ordinance shall be added to and 
 form a part of the cost of such "Immediate Rehabilita- 
 tion," but thereafter shall be paid out of gross receipts, 
 as an operating expense. 
 
 In case the said ordinance to the said Chicago Rail- 
 ways Company is passed and accepted by said Chicago 
 Railways Company, the third engineer and the engineer 
 representing the city on the Board of Supervising Engi- 
 neers created by said ordinance shall be the same persons 
 who act as the third engineer and the engineer represent- 
 ing the city, respectively, in the Board of Supervising 
 Engineers created by this ordinance; and the said Chi- 
 cago Railways Company and the Chicago City Railway 
 Company shall agree upon one engineer as their joint 
 representative upon said Board; but in case they do not 
 so agree, each of said companies may select its own rep- 
 resentative, who shall in such case act as a member of 
 said board only in the consideration and determination of 
 matters relating to the street railways and property of the 
 particular company he represents.
 
 312 
 
 In the determination of any matter relating to subways 
 and through routes and all other matters in which said 
 companies are jointly interested the representative of each 
 of said companies on said Board of Supervising Engi- 
 neers shall be entitled to one-half of a vote. 
 
 In case said ordinance to said Chicago Railways Com- 
 pany is passed and accepted by said company, the salaries 
 and compensation of said engineers provided for in this 
 ordinance shall include all compensation or salaries pay- 
 able to said engineers under said other ordinance without 
 duplication, and shall be equitably apportioned by the 
 said third engineer between the said two companies, tak- 
 ing into consideration the work done by said board under 
 the said ordinances, respectively, and the determination 
 of said third engineer as to such apportionment shall be 
 final and binding upon the parties whose interests are 
 therein concerned. 
 
 CITY TO RESERVE POLICE POWER. 
 
 Sec. 35. Nothing in this ordinance contained shall be 
 construed as depriving the said city of the right of exer- 
 cising any police power which it would have possessed or 
 enjoyed had this ordinance not been granted. 
 
 The enumeration herein of special requirements and spe- 
 cific regulations shall not be taken or held to imply the re- 
 linquishment by the said city of its power to make other 
 requirements or regulations, and the said city hereby ex- 
 pressly reserves the right to make all regulations which 
 may be necessary to secure in the most ample manner the 
 safety, welfare and accommodation of the public, includ- 
 ing among other things the right to pass and enforce or- 
 dinances to protect the public from danger or inconveni- 
 ence in the management and operation of street railways 
 throughout the said city and the right to make and en- 
 force all such regulations as shall be reasonably necessary 
 to secure adequate and sufficient street railway accom-
 
 313 
 
 modations for the people, and insure their comfort and 
 convenience. 
 
 The said council may vest any or all matters of admin- 
 istration under this ordinance, including such thereof as 
 are herein vested in the mayor, comptroller or other city 
 officials named in this ordinance or in said Exhibit B at- 
 tached hereto (but excepting those herein vested in said 
 Board of Supervising Engineers), in a department or 
 bureau of local transportation, or in its city engineer, or 
 in any official or employes of said city. 
 
 COMPREHENSIVE RECONSTUCTION AND UNIFIED OPERATION 
 
 ASSURED. 
 
 Sec. 36. For the purpose of carrying into effect the 
 purpose and desire of the said city to provide for the uni- 
 fied operation and the comprehensive reconstruction of 
 all the street railways within said city, an ordinance sim- 
 ilar to this ordinance in general provisions and character, 
 covering the system of street railways now maintained 
 and operated by the receivers of the Chicago. Union Trac- 
 tion Company, granting to the Chicago Railways Com- 
 pany the right to operate said system, has been presented 
 for passage by the city council of said city, concurrently 
 with this ordinance, and it is hereby expressly provided 
 that in the event that the company accepts this ordinance 
 and files the bond as required in this ordinance within 
 the time herein prescribed and the said Chicago Railways 
 Company fails to accept the said ordinance to the said 
 Chicago Railways Company after its passage and within 
 the time and according to the terms provided therein, or 
 in any ordinance amendatory thereof or supplementary 
 thereto, the company hereby obligates itself to extend and 
 operate its street railway system over and upon the 
 streets and parts of streets in the said city covered by 
 the said ordinance to the said Chicago Railways Company, 
 so far as and to the extent that the rights of the compa-
 
 314 
 
 nies now operating the street railways upon such streets 
 and parts of streets cease and expire by limitation or 
 otherwise, the said street railway system of the company 
 to he extended over each such street or part of street as 
 rapidly as and to whatever extent the said city is able to 
 and does confer upon the company lawful authority to 
 construct and operate street railways upon such streets 
 and parts of streets, respectively, and deliver to the 
 company peaceable possession thereof for such purposes. 
 And the company hereby agrees to construct and operate in 
 each such street and part of street so turned over to it as 
 aforesaid, the street railways and equipment required by 
 the ordinance to said Chicago Railways Company to be 
 constructed by it therein, including the reconstruction of 
 the tunnels under the Chicago river at Washington and 
 La Salle streets, respectively, and the making of the con- 
 tribution for the construction of subways and extensions 
 thereof provided for in said last mentioned ordinance. 
 
 And the said company agrees that it will furnish the 
 necessary moneys to pay or to enable said city to pay for 
 the physical property constituting the street railways and 
 equipment in any such street or part of street which the 
 city or its licensee may be authorized or required to pur- 
 chase under and in accordance with the terms of the ordi- 
 nances of said city which have been heretofore passed 
 and are now in force with respect to any such street or 
 part of street, respectively, property so purchased to be 
 turned over to the company as a part of the extension of 
 the company's system provided for in this section, and 
 the moneys so paid or advanced shall be held and consid- 
 ered as a part of the expense of making such extension. 
 For the purpose of making any such extension the com- 
 pany agrees that it will, when authorized and required 
 by the city, purchase and pay for the physical property 
 constituting the then existing street railway and equip-
 
 315 
 
 ment located upon any street or part of street turned 
 over to the company under the foregoing provisions of 
 this section, provided the price to be paid for such prop- 
 erty shall not exceed the value of the same for street rail- 
 way purposes as estimated by the Board of Supervising 
 Engineers, and that, when acquired, said property shall 
 be used by the company as a part of the extension of its 
 system upon such street or part of street under the pro- 
 visions of this ordinance, and that the amount paid for 
 such property shall be held and considered as a part of 
 the cost of making such extension under the provisions of 
 this ordinance. 
 
 All such extensions of the company's system and the 
 operation thereof shall be subject to the provisions of this 
 ordinance, in the same manner and to the same extent 
 as if herein expressly provided for as a part of the street 
 railway system of the company covered by this ordinance. 
 
 The construction and equipment of all such extensions 
 shall be made under the supervision of and the cost there- 
 of determined by the said Board of Supervising Engi- 
 neers, and such extensions shall be in all respects subject 
 to the provisions of this ordinance as to purchase by the 
 said city or its licensee, the determination of the charac- 
 ter and cost of construction, reconstruction, equipment 
 and re-equipment, the annual return to the company upon 
 its investment, the division of profits with the said city 
 and the operation of such extensions by the company, so 
 far as such provisions can be made applicable thereto. 
 
 The city agrees that, in case it shall require the com- 
 pany to extend its street railway system over or upon any 
 street or part of street covered by the said ordinance to 
 the said Chicago Railways Company, under the provisions 
 of this section, the company shall have the right to extend 
 its street railway system over and upon all of the streets 
 and parts of streets covered by the ordinance to the said
 
 316 
 
 Chicago Kailways Company, upon the terms specified in 
 this section, when and as soon as the now existing rights 
 of other companies in said streets or parts of streets, 
 respectively, shall expire or be terminated. 
 
 The obligations of the company under this section to 
 construct, reconstruct, equip, re-equip and operate street 
 railways, tunnels and. subways, and to furnish funds to 
 the city for the purposes specified in this section, may be 
 discharged either by the company itself, or at its election, 
 from time to time, either in whole or in part, through the 
 agency of the Chicago City Railroad Company (herein- 
 after called the railroad company), a corporation organ- 
 ized under the laws of the state of Illinois, provided that 
 the company shall first enter into such contracts and ar- 
 rangements with the railroad company as shall secure and 
 make certain the operation of the lines of street railways 
 constructed by the railroad company as an integral part 
 of the street railway system of the company, and also 
 shall secure to the city and its licensee and to the public 
 the same rights in and upon all of the said lines of the 
 street railways, tunnels and subways of the company, 
 falling within the provisions of this section, which would 
 have existed if the entire obligations of the company 
 under this section' had been discharged by it directly 
 without the intervention of the railroad company, includ- 
 ing the right of the city or its licensee to purchase all 
 such lines of street railways (including all interest in 
 tunnels and subways), in the same manner and upon the 
 same terms and conditions as though all and every part 
 thereof had been constructed, or the money therefor 
 had been advanced, by the company, without any interest 
 therein having at any time been in the railroad company. 
 
 The railroad company, in consideration of the passage 
 of this ordinance, hereby assumes and agrees to discharge 
 all the obligations assumed or imposed, or attempted to
 
 317 
 
 be assumed or imposed, upon the company as to street 
 railways, tunnels and subways within the north and west 
 divisions of the city of Chicago, in all respects the same 
 as though it, had been named in place of the company in 
 the foregoing clauses of this section; and agrees 1 that all 
 the work done by it and the moneys advanced by it shall 
 be subject to all the provisions of this section, and of all 
 the other sections of this ordinance, to the same extent 
 and in the same manner as though said obligations had 
 been discharged by the company, and all moneys advanced 
 by the railroad company had been advanced by the com- 
 pany. 
 
 The railroad company further agrees that the city and 
 its licensee and the public shall have the same rights in 
 and upon any and all of the lines of street railways, tun- 
 nels and subways constructed in whole or in part by it, or 
 with moneys advanced by it, which they would have had 
 if the same had been constructed and the contributions 
 to the cost, thereof had been made wholly by the company 
 under the terms and provisions of this section, without 
 the intervention of the railroad company, including the 
 right of the city or its licensee to purchase such street 
 railways and other property or interests therein, in the 
 same manner, for the same price and upon the same terms 
 and conditions as though all and every part thereof had 
 been constructed or the money therefor had been ad- 
 vanced by the company, without any interest therein h;iv 
 ing at any time been in the railroad company; and the 
 railroad company hereby consents and agrees 1 that the 
 entire purchase price therefor may be included in one 
 sum paid to or deposited to the credit of the company 
 under the terms and provisions of this ordinance, the 
 railroad company agreeing to rely wholly upon its agree- 
 ment with the company for its interest in, or share of, 
 such purchase price. The railroad company and the com-
 
 318 
 
 pany further undertake and agree that all street railways, 
 tunnels and subways, and other railway properties ac- 
 quired, constructed or operated under the provisions of 
 this section, including those constructed by, or the cost of 
 which shall be defrayed in whole or in part by the rail- 
 road company, shall form, and be operated as, an integral 
 part of the street railway system of the company, under 
 a lease or leases, or operating agreement or operating 
 agreements, between the railroad company and the com- 
 pany. 
 
 The railroad company by its acceptance of this ordi- 
 nance expressly agrees with the said city that all the 
 terms, provisions and conditions of this ordinance shall 
 apply to and control the construction and operation of 
 any street railway properties in which it shall have any 
 interest, or to the cost of which it shall contribute, in 
 like manner and to the same extent as though such street 
 railway properties were wholly constructed and operated, 
 and the contributions to the cost thereof were made by 
 the company. And the railroad company and the com- 
 pany further covenant and agree with the city, that as 
 between the city and the railroad company and the com- 
 pany, all books of account, settlements, charges on capital 
 account, payments or interest on capital account, expendi- 
 tures and' deposits on account of maintenance, repairs 
 and renewals, and the division of net receipts, shall be 
 made with regard to the entire properties constructed 
 under or operated by both of said companies under this 
 ordinance, as though the ownership, operation and con- 
 trol of the same were wholly and solely in the company, 
 to the end that the rights of the city under this ordinance 
 shall in no wise be different in any respect from what 
 they would have been if the entire street railway proper- 
 ties (including subways and tunnels) affected by this or- 
 dinance had been constructed, operated, and the contribu-
 
 319 
 
 tions to the cost thereof made wholly and solely by the 
 company. 
 
 The company further agrees that a forfeiture of all 
 of its rights and privileges under this ordinance may be 
 declared and enforced for any default of the railroad 
 company in the observance or performance of any agree- 
 ment or condition herein contained to be kept and per- 
 formed by it, in like manner and with like effect as 
 though such default was the default of the company; and 
 the railroad company covenants and agrees that any for- 
 feiture of the rights and privileges of the company shall 
 operate and be effective as a forfeiture of all of the 
 rights and privileges of the railroad company under this 
 ordinance, to the same extent and with the same effect 
 as the rights and privileges of the company shall have 
 been forfeited by reason of such default. 
 
 The company further agrees that if any of the agree- 
 ments or undertakings on the part of the company in 
 this ordinance contained shall be ultra vires such fact 
 Shall in nowise affect or impair the right of the city to 
 declare a forfeiture of all the rights and privileges by 
 this ordinance granted to the company, on account of the 
 non-performance of any such ultra vires agreement or un- 
 dertaking, in the same manner and with like effect as 
 though all of such agreements and undertakings were 
 within the company's chartered powers, the grants herein 
 made to the company being expressly conditioned on the 
 performance of each and every one of the agreements and 
 undertakings of the company herein contained, the for- 
 feiture of the company's rights, however, to be made in 
 the manner and with the effect provided in Section 31 of 
 this ordinance. 
 
 ORDINANCE BINDING UPON SUCCESSORS AND ASSIGNS. 
 
 Sec. 37. This ordinance shall inure to the benefit of 
 and be binding upon the lessees, successors and assigns
 
 320 
 
 of the company, and they and each of them shall be 
 bound by all and every its provisions by the company to 
 be kept and performed, precisely as if in every case they 
 had respectively been named herein with the company. 
 
 LEASE OR ASSIGNMENT. 
 
 Sec. 38. No lease, or operating agreement, and no as- 
 signment (except by way of mortgage or trust deed, under 
 the foregoing provisions and limitations of this ordi- 
 nance), shall be made by the company without the con- 
 sent of the city council of said city. 
 
 WARRANTY OF TITLE. 
 
 Sec. 39. Whenever the city, or its licensee, shall de- 
 sire to purchase and take over the street railway system 
 of the company within the said city, as in this ordinance 
 provided, and shall comply with the provisions of this 
 ordinance with respect to making such purchase and pay- 
 ment therefor, the company shall, by good and sufficient 
 written instruments to that end, transfer to the city, or 
 its licensee, as the case may be, all its said street railway 
 system and property, free from all claims 1 and liens what- 
 soever, and the company shall warrant the title to all of 
 the property so transferred to the city or its licensee, to 
 be free from all claims and liens whatsoever, and also that 
 there are no outstanding rights in the streets or parts of 
 streets occupied by its street railways, in any person or 
 corporation, derived through or under said company, ex- 
 cept the rights of the Chicago General Railway Company 
 on Twenty-Second, Main and Laurel streets under the 
 leases referred to in Section 1 of this ordinance, and if 
 at the date of said purchase there shall exist any defect 
 in or incumbrance upon the company's title to any of the 
 real estate now owned by the company, an amount of the 
 purchase price equal to the appraised value of the real 
 estate, the title to which shall be incumbered or defective,
 
 321 
 
 as shown by the appraisal inventory made by Bion J. 
 Arnold, Mortimer E. Cooley and A. B. du Pont, herein- 
 before mentioned, shall remain in one or more of the de- 
 positaries with which the city or its licensee shall deposit 
 the purchase money for said street railway properties 
 until such defects 1 and incumbrances shall be cured or re- 
 moved, as security to the purchaser against loss by rea- 
 son of such defects or incumbrances. 
 
 BOND. 
 
 Sec. 40. The company shall forever indemnify and 
 save harmless the said city against and from alL damages, 
 judgments, decrees, costs and expenses which the said 
 city may suffer or which may be recoverable from or ob- 
 tained against the said city, for or by reason of the grant- 
 ing of the privileges hereby conferred upon the com- 
 pany, or for or by reason of or growing out of or result- 
 ing from the exercise by the company of the privileges 
 hereby granted, or any of them, or from any act or acts 
 of the company, its servants or agents, under or by 
 virtue of the provisions of this ordinance. 
 
 And the company shall, within the time limited for the 
 acceptance of this ordinance, file with the city clerk of 
 said city its bond to the said city, in the penal sum of 
 one hundred thousand dollars, conditioned t)hat it will 
 forever indemnify and save harmless the said city as 
 aforesaid; provided, however, that the giving of said bond 
 or the recover}* of a judgment or judgments thereon by 
 the said city shall not be construed as measuring, lessen- 
 ing or limiting the liability of the company to the said 
 city under and provisions of this ordinance. 
 
 BIGHTS AND OBLIGATIONS DATE FROM FEBRUARY 1, 1907. 
 
 Sec. 41. If the company shall accept this ordinance 
 within the time limited therein for the acceptance thereof, 
 then the rights and obligations of the city and the com-
 
 322 
 
 pany under this ordinance shall be the same as if this 
 ordinance had been passed on February first, 1907, and 
 had been accepted by the company on February first, 
 1907, and accounting shall be had as between the city 
 and the company as of that date. 
 
 ACCEPTANCE. 
 
 Sec. 42. This ordinance shall not take effect or be in 
 force unless and until a majority of the votes cast upon 
 the following question of public policy at the election to 
 be held in the city of Chicago, on the first Tuesday in 
 April, A. D. 1907, are in the affirmative: 
 
 "For the approval of ordinances substantially in 
 the form of the pending ordinances (reported to 
 the city council of the city of Chicago on Jan- 
 uary 15, A. D. 1907), authorizing the Chicago City 
 Railway Company and the Chicago Railways Com- 
 pany, respectively, to construct, maintain and oper- 
 ate street railways in said city, and providing for 
 the purchase thereof by the said city or its licen- 
 see." 
 
 In the event, and only in the event, that the said ques- 
 tion of public policy is submitted to the electors of said 
 city at said election and a majority of the votes cast 
 upon the said question at said election are in the affirma- 
 tive, then, and in that event, this ordinance shall take 
 effect and be in force from and after its acceptance by 
 the company and by the railroad company, under their 
 respective corporate seals, after the said first Tuesday 
 in April, A. D. 1907; provided, that if the company shall 
 not file with the city clerk of said city the penal bond 
 above herein mentioned, or if either the company or the 
 railroad company shall not file its formal acceptance of 
 this ordinance and of all its terms and conditions within 
 ninety (90) days from the passage hereof, then all rights
 
 323 
 
 and privileges hereby granted shall be wholly null and 
 void and of no effect; the acceptance of this ordinance by 
 both of said companies being hereby made a condition of 
 this ordinance taking effect.
 
 324 
 
 No. 3 
 
 Ordinance No. 16238-A. 
 
 AN ORDINANCE granting a renewal of the street rail- 
 way grants of The Cleveland Railway Company, fix- 
 ing the terms and conditions of such renewal grant, 
 changing the rates of fare, regulating transfers and 
 terminating existing grants. 
 
 Whereas, The Cleveland Railway Company is the owner 
 of a system of street railroads within the city of Cleve- 
 land; and 
 
 Whereas, The Forest City Railway Company, The 
 Municipal Traction Company and The Cleveland Rail- 
 way Company are parties to litigation affecting the own- 
 ership of various unexpired street railroad grants for 
 lines, all of which lines are now operated by a receiver 
 appointed by the Circuit Court of the United States for 
 the Northern District of Ohio, Eastern Division; and 
 
 Whereas, It is the common desire of the city and The 
 Cleveland Railway Company to have all the grants of 
 street railway rights in the city of Cleveland now out- 
 standing surrendered and renewed upon terms herein- 
 after recited, to the end that the rate of fare may be 
 reduced, the transfer privileges made definite and the 
 right of the city as to regulation and possible acquisition 
 made certain; and 
 
 Whereas, It is agreed that a complete re-adjustment 
 of the street railroad situation should be made upon 
 terms that will secure to the owners of the property in- 
 vested in street railroads securities as to their property, 
 and a fair and fixed rate of return thereon, at the same 
 time securing to the public the largest powers of regula- 
 tion in the interest of public service and the best street
 
 325 
 
 railroad transportation at cost, consistent with the secur- 
 ity of the property and the certainty of a fixed return 
 thereon and no more; 
 
 Now, therefore, be it ordained by the council of the 
 city of Cleveland, State of Ohio, that 
 
 Section 1. Wherever in the following ordinance the 
 words "The Cleveland Railway Company," "The Com- 
 pany," or "said Company" are used, they shall be held 
 to mean and include The Cleveland Railway Company; 
 wherever the words "the City" are used, they shall be 
 held to mean and include the city of Cleveland, and 
 wherever officers of the city of Cleveland are mentioned 
 by the name of their office or their descriptive designa- 
 tion, such description shall be held to mean and include 
 the incumbents of any offices hereafter created, perform- 
 ing functions similar to those now imposed by law upon 
 the officers designated herein. 
 
 Wherever in this ordinance, except in Section 48, the 
 expression "taking effect of this ordinance" is used, it 
 shall be held to mean the thirty-first day after the pas- 
 sage and due publication of this ordinance, no petition 
 for its submission to popular vote having been presented 
 or filed in accordance with the statute in such case made 
 and provided, or if such petition has been presented or 
 filed, the day following the official ascertainment that a 
 majority of the popular vote at the submission of this 
 ordinance to vote has been in favor of this ordinance. 
 
 Sec. 2. The Cleveland Railway Company is hereby 
 granted, upon the conditions herein provided, a renewal 
 until the 1st day of May, 1934, of the right to maintain 
 and operate its existing street railroad, by single or more 
 tracks, as the same now exists in the city of Cleveland, 
 with all necessary curves, street crossings, connections, 
 turn-outs, cross-overs, Ys, loops, poles, trolley-, feed-, 
 span-, and guy-wires, equipment and other appliances,
 
 326 
 
 upon, over and along the following streets, parts of 
 streets and other public ways and places in the city of 
 Cleveland, said streets being grouped into numbered 
 streets east of the north and south meridian, numbered 
 streets west thereof, named streets alphabetically ar- 
 ranged, and private rights-of-way. 
 
 (Here follows a list of streets, and it is recited that 
 the city owns the tracks in some parts thereof.) 
 
 Sec. 3. The motive power for the operation of the 
 company's railway shall be electricity, or such other mo- 
 tive power as council shall approve, the construction and 
 equipment first class and to the satisfaction of the city. 
 The tracks hereafter laid in paved streets, either as new 
 construction or as renewal of existing construction shall, 
 with respect to their style and construction, conform to 
 the general ordinances of the city as the same now are, 
 or as they may be hereafter. 
 
 Sec. 4. The right is hereby given to the company to 
 maintain its present lines of poles and wires, and to 
 erect and maintain such other lines of poles and wires 
 as may be necessary to connect its power houses and its 
 said street railroad system, and to maintain its feeder 
 caWes as at present located in the city water works tun- 
 nel, or hereafter located in said tunnel or other tunnels 
 or conduits, with the permission of the city, and upon 
 the payment by the company of such reasonable annual 
 charge as the city may from time to time make therefor 
 for all users thereof and to maintain its present intake 
 and discharge water pipes and intake cribs between its 
 power house on Washington avenue, N. W., and the Cuya- 
 hoga river, and such other intakes as may be hereafter 
 authorized by said city, and wherever any of the routes 
 provide for or include private right-of-way or property, 
 the company is granted the right to maintain and operate 
 its tracks on and across any and all intervening streets,
 
 327 
 
 and to maintain all poles and wires necessary to such 
 purpose. 
 
 Sec. 5. The city reserves the right to grant to any 
 other person or corporation the right jointly to occupy 
 and use for street railroad purposes, within the follow- 
 ing described territory, the whole or any part of the 
 tracks, poles, wires and electric current herein author- 
 ized to be maintained and operated, and all other appli- 
 ances and power now or hereafter used for street railway 
 purposes, said territory being known as the central dis- 
 trict of the city, bounded as follows: 
 
 Beginning at the shore of Lake Erie at the intersection 
 of the east line of East 12th street projected to said shore 
 of Lake Erie; thence along the east line of said East 12th 
 street and East 12th street projected, southerly to the 
 southerly line of Central avenue S. E.; thence along the 
 southerly line of Central avenue S. E. to the southerly 
 line of the Central Viaduct and its approaches; thence 
 along the southerly line of the Central Viaduct and its 
 approaches to the easterly line of West 14th street; thence 
 along the easterly line of West 14th street to the south- 
 erly line of Abbey avenue S. W. projected; thence along 
 the southerly line of Abbey avenue S. W. projected and 
 the southerly line of Abbey avenue S. W. bridge and its 
 approaches to the southerly line of Lorain avenue; thence 
 along the southerly line of Lorain avenue to the westerly 
 line of West 25th street ; thence along the westerly line of 
 West 25th street to the southerly line of Detroit avenue 
 N. W. ; thence along the southerly line of Detroit avenue 
 N. W. to the westerly line of W r est 28th street; thence 
 along the westerly line of West 28th street and along said 
 westerly line projected to its intersection with Lake Erie ; 
 thence along the southerly shore of Lake Erie, as the same 
 now is or hereafter may be, to the place of beginning.
 
 328 
 
 The right of joint occupancy and use herein reserved 
 shall be upon such reasonable terms and conditions as 
 the council may prescribe. 
 
 Sec. 6. The construction, rolling stock, equipment, 
 maintenance and operation of the street railroads herein 
 authorized shall be su'bject to and governed by the gen- 
 eral street railroad ordinances now in force, except as 
 the same are herein modified, and future ordinances and 
 regulations of the city not inconsistent herewith, except 
 that the company shall not be required to pay any car 
 license fee. 
 
 Sec. 7. The company shall maintain in constant re- 
 pair the pavement within a space seven (7) feet in width 
 for single-track and for double-track the entire space be- 
 tween the outer rails of both tracks, including the space 
 between the two tracks and one foot outside of each outer 
 rail, but in no event to exceed eighteen feet, except about 
 curves, special work and where there are more than two 
 tracks in a street in all paved streets occupied by its 
 tracks, whether such streets were paved at the time of 
 the passage of this ordinance, or subsequently thereto, 
 but the company shall not be required to repave by virtue 
 of this obligation to repair, nor by virtue of any require- 
 ment of the general ordinances of the 'City of Cleveland 
 during the continuance of this grant. 
 
 Sec. 8. The company at once, upon the taking effect of 
 this ordinance, shall proceed by the acquisition of new 
 cars or by alteration of existing cars to extend the pay- 
 enter system of fare collections, and in case it is aWe, 
 acting in good faith, to raise the money so to do, within 
 five months from that date, the company shall have in 
 use upon its system not fewer than 450 pay-enter cars, 
 and in 18 months from that date shall have all of the 
 cars operated by it equipped as pay-enter cars, provided 
 that small open cars now owned by the company, not in
 
 329 
 
 excess of 100 in number, may be continued in use by the 
 company as trailers. The phrase "pay-enter car," as 
 used in this ordinance, shall be held to mean a car 
 equipped with a fare-box and so arranged as effectively 
 to provide for the prepayment of fares by passengers. 
 The expense of the acquisition of such pay-enter cars 
 and seventy-five per cent (75$) of the cost of reconstruct- 
 ing or remodeling cars owned by the company at the 
 time of the taking effect of this ordinance so as to make 
 them pay-enter cars, shall be added to the capital value 
 of the company, as defined in Sections 16 and 18 of this 
 ordinance. 
 
 Sec. 9. The company shall place and continue upon all 
 of its lines cars of modern design, equipped and furnished 
 with such improvements and appliances as shall be 
 deemed by the city to be necessary and proper for the 
 safety, convenience and comfort of the passengers and 
 the public, and shall run such cars in such numbers, at 
 such intervals of time subject to the limitation herein- 
 after provided, and under such rules and regulations as 
 the city may 'from time to time require, and shall cause 
 such cars to stop at such places as the city may designate 
 for passengers to leave or enter the same. The city re- 
 serves to itself the entire control of the service, including 
 the right to fix schedules and routes, including routes 
 and terminals of interurban cars, the character of the 
 cars, the right to increase or diminish service, provided 
 only that the council shall not require service to an ex- 
 tent which at the maximum rate of fare will not pro- 
 duce, to be credited to the interest fund, money enough to 
 make good any loss therein and to meet the requirements 
 of Sections 16 and 18 hereof. 
 
 And provided further, that whenever in the opinion of 
 the company any resolution or ordinance of the council
 
 330 
 
 regulating service will, if such service be installed at the 
 maximum rate of fare provided in Section 22 hereof, not 
 produce, to be credited to the interest fund, money enough 
 to make good and meet the requirements of Sections 16 
 and 18 hereof, then and in any such event the company 
 shall at once install such service and may require the 
 question whether the continuation of such service would, 
 at the maximum rate of fare, impair the ability of the 
 company to meet the requirements of Sections 16 and 18 
 hereof, to be submitted to arbitration as hereinafter pro- 
 vided, and if the board of arbitration decide that such 
 service will not produce the moneys needed as aforesaid, 
 then the resolution or ordinance shall not be further com- 
 plied with by the company, and the company shall have 
 the right to recoup any losses sustained in the manner 
 
 fixed by the board of arbitration to which the question of 
 the continuation of such service has been submitted. 
 
 Sec. 10. Immediately upon the taking effect of this 
 ordinance there may be designated by the city a City 
 Street Railroad Commissioner, which designation shall 
 toe made by the Mayor of the city, subject to the approval 
 of the City Council. The city reserves the right at any 
 time and from time to time to remove the Street Kail- 
 road Commissioner designated by it, such removal to be 
 by the mayor, and to fill the vacancy in the manner pro- 
 vided for original designation, and the city shall forth- 
 with, upon the naming of any City Street Railroad Com- 
 missioner, notify the company in writing of the name 
 and address of such commissioner. 
 
 The City Street Railroad Commissioner shall act as 
 the technical adviser of the council of the City of Cleve- 
 land in all matters affecting the interpretation, meaning 
 or application of any of the provisions of this ordinance, 
 and of action thereunder affecting the quantity or quality 
 of service, or the cost thereof, or the rate of fare. He
 
 331 
 
 shall keep always informed as to all matters affecting 
 the cost or quality or quantity of service furnished, the 
 receipts and disbursements and property of the company, 
 the rate of fare, the vouchering of expenditures; and if 
 he disapproves of the vouchering of expenditures or of 
 the manner of keeping accounts, or other matters affect- 
 ing the bookkeeping of the company, he shall at once 
 take the matter up with the company, and in case of dis- 
 agreement the matter shall at once be submitted to the 
 committee on standard classification of accounts of the 
 American Street and Interurban Railway Accountants' 
 Association, or to such person or persons upon whom 
 the regulation of such matters may from time to time 
 be devolved by law, and the decision of such committee 
 or person or persons, not inconsistent w T ith the provisions 
 of this ordinance, to whom this question is thus submit- 
 ted, shall be final. 
 
 In the case of any temporary absence or disability of 
 the City Street Railroad Commissioner, the mayor may 
 designate someone to act in his stead, notice being given 
 to the company as heretofore provided. 
 
 The president of the company, or in his absence or 
 disability, such other person as shall have been designated 
 by the president, and notice thereof given to the city, 
 and if no such designation has been made, then the high- 
 est executive officer of the company in the order named 
 in the company's by-laws, a copy of which shall be fur- 
 nished to the city with all amendments from time to time 
 made, in the city at the time shall represent the company 
 in all matters relating to the supervision or performance 
 of the duties hereby entrusted to the commissioner. 
 
 The company shall furnish to the .City Street Railroad 
 Commissioner suitable room in connection with the gen- 
 eral offices of the* company, and office furniture, station- 
 ery and supplies. The City Street Railroad Corn-mis-
 
 sioner shall receive salary at a rate to be fixed from time 
 to time by the council, but not exceeding fl,000 per 
 month, payable by the company and charged to operating- 
 expenses, and shall have the right to employ such assist- 
 ants, accountants, engineers, clerks and other employes 
 as he shall deem necessary to enable him at all times to 
 inspect and audit all receipts, disbursements, vouchers, 
 prices, pay-rolls, time-cards, papers, books, documents 
 and property of the company, and the cost and expense 
 of all such persons so employed by the City Street Kail- 
 road Commissioner, at salaries fixed by him, shall be paid 
 by the company monthly upon the approval of the said 
 City Street Railroad' Commissioner, provided that the 
 aggregate amount thereof in any one month shall not 
 exceed 1 per cent upon the sum set aside in that month 
 under section 19 hereof to be used for operating expenses 
 by the company, and the sum so expended by the City 
 Street Railroad Commissioner shall be subject to the ap- 
 proval of the council, and shall be deemed a part of such 
 operating expenses. Provided further, that the sums 
 authorized to be expended by the City Street Railroad 
 Commissioner under the provisions of section 28 hereof 
 shall be in addition to the amount in this section author- 
 ized to be so expended, and shall be subject to like ap- 
 proval of the council. 
 
 Sec. 11. Whenever any difference shall arise with re- 
 gard to any of the provisions of this ordinance or of the 
 rights of the company or the city hereunder between the 
 company and the city, and the difference is with regard 
 to a matter which might lawfully be arbitrated and is 
 not herein excluded from arbitration, then the company 
 or the city may require such question or questions to be 
 submitted to arbitration, such arbitration to be by a 
 board of arbitration selected in the following manner:
 
 333 
 
 the company or the city demanding arbitration shall 
 name its representative upon said board and notify the 
 other party, together with notice of the question upon 
 which arbitration is demanded. Within ten days there- 
 after the representative of the other party shall be named 
 by such party and notice of such selection given, failure 
 to do which shall entitle the party demanding the arbi- 
 tration to name such second arbitrator. The two thus 
 selected shall within ten days after the appointment of 
 the one last named select a third arbitrator, and if the 
 two said parties are unable within ten days to agree 
 upon such third arbitrator, then upon the application 
 of either the person who is District Judge of the United 
 States for the Northern District, Eastern Division of 
 Ohio, or such district as shall then comprise the city of 
 Cleveland, shall have the power to appoint such third 
 arbitrator, five days notice of the application to said 
 District Judge being given by the party applying to the 
 other party, and in the application for such appoint- 
 ment the party applying shall formulate the questions 
 to be determined by the board of arbitration. Before 
 making a final appointment pursuant to any such appli- 
 cation, the person making such appointment shall jrivc 
 three days' notice to the company and the city of the 
 person or personsi considered by him, and either the 
 city or the company may, within said three days pre- 
 sent objection to any person or persons under consid- 
 eration. When such third arbitrator shall have been 
 appointed a majority shall have power to decide the 
 questions submitted to it. Whenever the appointment 
 of a board of arbitration has been made, as hereinbefore 
 provided, and questions submitted for decision, they 
 shall be decided within thirty days from the date of the 
 appointment of the third arbitrator, unless the board of
 
 334 
 
 arbitration unanimously agree to an extension of time, 
 and should said questions not be determined within said 
 thirty days and no such extension of time made, then 
 either party may apply to the person who is Judge of 
 the District Court aforesaid, for the removal of said 
 third arbitrator, and the appointment of a third arbi- 
 trator in place of the one removed and such third arbi- 
 trator shall be appointed as is herein provided for the 
 original appointment of said third arbitrator. 
 
 In the event of the disqualification or refusal to act 
 of the person who is Judge of the District Court of the 
 United States, as hereinbefore provided, any person who 
 is Judge of the Circuit Court, of the United States of 
 the circuit in which the City of Cleveland shall then be 
 situated shall on request, as hereinbefore provided, have 
 power to appoint or to remove and appoint such third 
 arbitrator as is hereinbefore provided. 
 
 All expenses of every kind, incurred by any board of 
 arbitration appointed hereunder, including the fees of 
 the arbitrators, shall be fixed by the board of arbitration 
 as a part of their award and snail be paid by the com- 
 pany, and charged to operating expenses, provided that 
 any such expense in any period of six months above the 
 sum of $5,000 dollars shall be paid as an expense, and 
 paid out of the interest fund. 
 
 Wherever herein the "board of arbitration" is referred 
 to or "the board" it shall be taken to include and mean 
 any board of arbitration constituted as hereinbefore pro- 
 vided, and wherever the "City Street Railroad Commis- 
 sioner" or "The Commissioner" is referred to it shall 
 be taken to mean and include the City Street Railroad 
 Commissioner as provided in section 10 hereof. 
 
 Wherever either in this section or elsewhere in this 
 ordinance notice is provided to be given to the company, 
 a notice in writing addressed to the president of the
 
 335 
 
 company, and delivered at the offices of the company, 
 shall be delivery of such notice, and wherever notice is 
 provided to be given to the city, such notice in writing 
 addressed to the City Street Kailroad Commissioner and 
 delivered at the office provided for him in section 10 
 hereof shall be delivery to the city. 
 
 Sec. 12. The board of arbitration herein created shall 
 have power to determine all questions of every kind, 
 character and description arising between the city and 
 the railway company, subject to the limitation contained 
 in section 11 hereof, in the carrying out of the provi- 
 sions of this ordinance, whether expressly committed to 
 determination by arbitration by the provisions of this 
 ordinance or not, when submitted to such arbitration in 
 the manner provided in Section 11 hereof, and the de- 
 termination in writing of said board of any question 
 submitted to them as aforesaid shall be final and bind- 
 ing, except that the right or power of said board to de- 
 termine any question as to control of the service and the 
 fixing of schedules and routes shall be subject to the 
 limitations prescribed by section 9 hereof. 
 
 The City Street Railroad Commissioner may, pending 
 the determination of any such question Try the Council, 
 and to meet emergencies, temporarily approve changes 
 in schedules or routes, but such schedules or routes so 
 changed shall continue in force only until the Council 
 shall have otherwise directed. 
 
 Sec. 13. Whenever any board of arbitration herein 
 provided for shall have considered and determined any 
 question, its determination shall be made in writing, 
 and copies thereof shall forthwith be filed with the com- 
 pany and the city, as provided for the delivery of notices 
 in section 11 hereof, and after such delivery the finding 
 of the board shall be binding and operative. The board 
 Shall, however, have the rig'ht in any finding made by it
 
 336 
 
 to fix the time within which the things by it required 
 shall be done. 
 
 Sec. 14. In case of any failure on the part of the 
 company to do and perform fully and in good faith any 
 direction or award made by the board of arbitration, as 
 hereinbefore provided, the rate per cent of interest pay- 
 ments provided in Section 16 hereof upon the capital 
 value, other than bonds and floating debts, shall be re- 
 duced from the rate then in force by such amount as 
 the arbitrators may determine, but not lower than one 
 per cent, below the rate then in force, and shall continue 
 at such reduced rate until in the opinion of the board 
 of arbitration the said order and direction has been car- 
 ried out by the company, and the board of arbitration 
 shall have power to determine in every instance whether 
 or not its orders have been carried out, and whether 
 or not the reduction in the return upon the capital value 
 above stipulated shall be made. 
 
 Sec. 15. At all times during the continuance of the 
 rights herein granted, and any renewal hereof, the com- 
 pany shall keep in its office, open to inspection at all 
 reasonable times, full, true and accurate accounts of all 
 moneys expended' and liabilities incurred in connection 
 Avith said business and the maintenance and operation of 
 said property, and also complete statistical accounts of 
 its business and operations, which accounts shall be kept 
 in the manner prescribed by the American Street and 
 Interurban Railway Accountants' Association, or as may 
 be provided by law or by any authority created by law, 
 and the said company shall make and furnish to the City 
 Street Railroad Commissioner monthly reports of its car 
 mileage and earnings, and such other statements and 
 reports, as the said commissioner may from time to time 
 direct, and said commissioner shall at all times have ac- 
 cess to and full authority to inspect, examine, audit and
 
 337 
 
 i 
 
 verify all accounts, vouchers, documents, books and prop- 
 erty of the company relating to the receipt and expendi- 
 ture of money and the business done by the company in 
 the operation of its railway. 
 
 Sec. 16. For the purpose of fixing, from time to time, 
 the rate of fare to be charged by the company, and the 
 return to the company for the service rendered by it to 
 the publk, and for the further purpose of fixing the 
 price at which the property of the company may be 
 purchased as hereinbefore provided, the capital value of 
 all of the property of said company shall consist of the 
 following items: 
 
 (a) The bonded indebtedness of the company, the 
 principal thereof aggregating 18,128,000.00, and any re- 
 newal of any part, or the whole thereof, and any addi- 
 tions thereto made pursuant to the provisions of this 
 ordinance. 
 
 (b) The floating indebtdness of the company aggre- 
 gating 11,288,000, represented by bills payable as of Jan- 
 uary 1, 1908, less whatever part thereof has been paid at 
 
 
 
 the time of the taking effect 'hereof; also whatever sum, 
 if any, is needed to be added to money on hand to place 
 the sum of $500,000 in the interest fund as provided in 
 Sec. 19, also, to the extent that there is no money on 
 hand after deducting from the cash on hand said sum 
 of $500,000, all existing debts of The Municipal Traction 
 Company, The Forest City Railway Company, The Low 
 Fare Railway Company, The Neutral Street Railway 
 Company, including claims 'hereafter liquidated; also in- 
 cluding a sum equal to 7 1-2 per cent upon the par value 
 of all stock guaranteed by the Municipal Traction Com- 
 pany and such further sum not exceeding fifty thousand 
 dollars ($50,000) as shall be determined, should equit- 
 ably be paid to persons who have disposed of stock held 
 under such guarantee, also an amount equal to the par
 
 338 
 
 value of the issued and outstanding capital stock of The 
 Neutral Street Kail way Company; also all existing debts 
 of The Cleveland Railway Company, and existing claims 
 against said company hereafter liquidated, and one and 
 one-half (11-2) per cent on $ 14,675,600, less the amount 
 paid by the Municipal Traction Company to stockholders 
 of the Cleveland Railway Company, on or about October 
 1, 1908, as for dividend, and interest at the rate of six 
 (6) per cent per ann<uin from January 1, 1910, to the 
 taking effect of this ordinance, upon the residue of the 
 capital value of the Cleveland Railway Company as de- 
 termined by the provisions of paragraph (c) of this sec- 
 tion to be divided among the stockholders of the Cleve- 
 land Railway Company; also all claims against the re- 
 ceivers which the Company may be required by order of 
 Court to pay; all of which shall be assumed, by the ac- 
 ceptance of this ordinance, by the company upon the tak- 
 ing effect of this ordinance. 
 
 (c) The residue of the capital value of the company 
 to wit the sum of $14,675,600, (The value of the proper- 
 ty is agreed to be $21,127,149.53 to which must be add- 
 ed, as the value of The Forest City property $1,805,- 
 600.00 and there is added the sum of $1,158,300.00, in- 
 terest accrued, but used to equalize stock value and not 
 to be paid, said interest being the equivalent of 9 per 
 cent upon $12,870,000 for the period ending January 1, 
 1910. The total of these sums is $24,091,049.53. From 
 this aggregate is deducted bonded indebtedness of $8,- 
 128,000.00, and floating indebtedness as of January 1, 
 1908, $1,288,000.00. The total of these sums is $9,416,- 
 000.00, leaving $14,675,049.53; agreed addition to equal- 
 ize stock value, $550.47, making for residue of capital 
 value, $14,675,600.00 with such additions thereto as may 
 from time to time be made pursuant to the provisions 
 of this ordinance.
 
 330 
 
 The company may at any time refund its bonds, or 
 capitalize or issue mortgage bonds for its floating debt 
 as denned in paragrapli ('b) provided that all bonds 
 hereafter sold by the company shall be sold at the best 
 price obtainable therefor and shall contain a provision 
 making them payable on ninety days call at any interest 
 maturing period at one hundred and five and accrued 
 interest and the city shall have thirty days' notice in 
 advance of all such proposed sales of bonds by the com- 
 pany. 
 
 There shall be paid out of the interest fund, as here- 
 inafter provided, all taxes and other payments herein 
 provided to be made therefrom and also, as return upon 
 the Capital value above described, five (5) per cent per 
 annum upon the total bonded indebtedness of the com- 
 pany, payable as provided by the mortgages securing the 
 bonds, and upon the refunding of any such bonded in- 
 debtedness there shall be paid out of the interest fund 
 that rate per cent upon such refunded bonded indebted- 
 ness, not in excess of six (6) per cent, which the re- 
 funding bonds may bear. 
 
 There shall be paid out of the interest fund as herein- 
 after provided, from time to time, interest at the rate 
 of six (6) per cent per annum upon the aggregate 
 amount of the debt of the company as fixed in clause 
 (b) of this section. 
 
 The company may issue and sell its capital stock or 
 mortgage bonds, said stock being sold for not less than 
 par, and said bonds for not less than par except with 
 the consent of the city, or increase its floating indebted- 
 ness in such amounts as sliall be necessary to capitalize 
 the debt enumerated in said paragraph (b), or to pro- 
 vide for such extensions, betterments or permanent im- 
 provements as it is by this ordinance provided may be 
 added to the capital value upon which interest is to be
 
 340 
 
 paid; and the par value of the stocks or bonds sold or 
 debt created for such purpose shall become a part of 
 the capital value. 
 
 After meeting the payments heretofore provided for 
 by this section, there shall be paid from the remainder 
 of said interest fund, to the stockholders, from the tak- 
 ing effect of this ordinance, quarterly, a sum equal to 
 six (6) per cent per annum, payable quarterly upon the 
 residue of capital value and additions thereto as pro- 
 vided by paragraph (c) hereof. 
 
 The company may, without the consent of the City, 
 issue and sell its capital stock or increase its bonded 
 or floating debt; but no increase in capital stock or 
 bonded or floating indebtedness by the company shall be 
 considered a part of the capital value for the purposes 
 of this section, unless made pursuant to the provision 
 of this ordinance or with the consent of the City. 
 
 Sec. 17. All debts of The Municipal Traction Com- 
 pany, The Forest City Kailway Company, The Low Fare 
 Railway Compan}-, The Neutral Street Railway Com- 
 pany and The Cleveland Railway Company, including 
 claims hereafter liquidated and including all payments 
 to be made as determined by Section 16 hereof, less all 
 proper credits asumed by the company as hereinbefore 
 provided, to the extent that the same can be paid out 
 of money on hand at the time of the taking effect of 
 this ordinance, after deducting therefrom the sum of 
 $500,000.00 to be credited to the interest fund as herein- 
 after provided, shall be so paid. 
 
 Sec. 18. To the capital value of the company, and 
 as a part of the capital value of said property, as that 
 term is defined by the provision of Section 16 hereof, 
 there shall be added from time to time, the par value 
 of bonds or stock sold or debt created for extensions, 
 betterments and permanent improvements as hereinafter
 
 341 
 
 provided. All earnings of the company from every source 
 above the operating expenses and maintenance, depre- 
 ciation and renewal allowance shall go into the interest 
 fund, as that fund is defined by Section 16. Out of that, 
 fund shall : be paid the sums provided to be so paid by 
 Section 16. Any surplus remaining in said interest fund 
 after the payment of taxes and other charges provided 
 by this ordinance to be paid therefrom, over and above 
 the sum of $500,000.00, shall constitute a fund to be 
 absorbed in the reduction of fares, and any deficiency 
 in the interest fund below $500,000.00, in any period of 
 operation, shall be first made good as is hereinafter pro- 
 vided, it being the intent hereof that the said interest 
 fund g&all be maintained at $500,000.00, and that all 
 the payments provided to be made by Section 16 shall 
 be cumulative and shall be first paid out of the interest 
 fund, without any deductions whatever, and for that 
 purpose, and out of the interest fund the company shall 
 pay all sums assessed against the company, its property 
 or stock, or against any income or interest of the stock- 
 holders by reason of their ownership of stock, by the 
 United States, the same being by law payable by the 
 company, or by the State of Ohio, or by any county, 
 municipal or Township authorities in that state. 
 
 The proceeds of the sale of any property of the com- 
 pany represented in the aggregate capital value of the 
 company, as that term is defined in Section 16 hereof, 
 may be used by the company in the payment of floating 
 indebtedness, or may in the company's discretion or if 
 required by the provisions of any mortgage made by the 
 company to secure any bonded indebtedness forming a 
 part of said capital value be deposited with the trustee 
 of such mortgage. All such sums at any time on deposit 
 with such trustee shall be first taken down and used by 
 the company in the construction or acquisition of any
 
 342 
 
 extension, betterment or permanent improvement there- 
 after made. All su^h property shall be sold at the best 
 obtainable price, and the amount of the proceeds and 
 the items of property sold shall be forthwith reported to 
 the council. To the extent that any part of the proceeds 
 of such sales is otherwise used by the company than in 
 the making of extensions, betterments and permanent 
 improvements, or depositing with such trustees as above 
 set forth, the capital value of the company, as described 
 in Section 16 hereof, shall be reduced;. 
 
 Sec. 19. Upon the taking effect of this ordinance, the 
 company shall, out of money on hand, or as provided in 
 Sec. 16 hereof, place the sum of $500,000.00 less prepaid 
 accounts and plus accrued accounts in the interest fund, 
 which fund shall be deposited separately from the cur- 
 rent receipts of the company and shall from time to 
 time have credited to it interest earned thereon by being 
 deposited in such banks as the company shall select. All 
 other moneys on hand shall be used in the payment of 
 debts included in Section 16 hereof. To the interest fund 
 thus created there shall be added monthly the sum re- 
 maining after deducting from the gross receipts for the 
 month eleven and one-half cents per car mile for each 
 revenue mile exclusive of car house and car yard miles, 
 made by a car equipped with motors operated during 
 the month, exclusive of cars operated to carry materials 
 used in the construction and repair work of the company 
 itself, and also sixty (60) per cent of eleven and one-half 
 cents per car mile for each revenue mile exclusive of car 
 house and car yard miles made by a revenue trailer oper- 
 ated during the month, and the sums provided in Section 
 20 to be deducted from gross receipts for the maintenance, 
 renewal and depreciation account and the fund thus cre- 
 ated shall be and constitute the interest fund out of which 
 all taxes, interest and dividend and other payments here-
 
 343 
 
 inbefore and hereinafter provided for shall be made. 
 Whenever the city establishes for any line a schedule 
 which requires the operation of more cars during any 
 hour in the day than twice the number of cars operated 
 per hour on the base table for such line, the company 
 shall be allowed by the city such additional car mile al- 
 lowance for cars so operated as shall be necessary to pay 
 the increased cost of such operation in excess of twice 
 the base table, if there shall be any such increased cost, 
 and in the event of disagreement thereon the amount, if 
 any, to be allowed, shall be determined by arbitration 
 in the manner hereinbefore provided. 
 
 Sec. 20. The sum provided in Section 19 hereof to be 
 deducted from the gross receipts of the company per car 
 miles of operation shall be used by the company for 
 operating expense, insurance, payment of claims and all 
 other expenditures, exclusive of the payments required 
 by Section 16 hereof to be made upon the capital value 
 of the company, and taxes and interest on floating debt 
 and payment herein provided to be made out of the in- 
 terest fund and no part thereof in excess of $1,000 per 
 month shall in any event be expended for any extension, 
 betterment or permanent improvement, and all sums so 
 expended within the limitation hereinbefore stated for 
 such extensions, betterments or permanent improve- 
 ments shall be reported monthly to and approved by the 
 council and the interest fund shall annually be reimburs- 
 ed for the full amount so expended by new capital, and 
 all sums so expended and not approved by the Council 
 as for extensions, betterments or permanent improve- 
 ments shall be charged to operating expenses. In addi- 
 tion to the car mile operating expense allowance provid- 
 ed in section 19 hereof there shall in the following 
 months be deducted from the gross receipts the follow- 
 ing sums, to wit :
 
 344 
 
 In January, February, March, April, May and Decem- 
 ber 4c per car mile; November 5c per car mile, and. in 
 June, Jul}-, August, September and October 6c per car 
 mile, the deductions being made as provided in section 
 19 hereof for revenue miles, exclusive of car house and 
 car yard miles made foy cars equipped with motors and 
 60 per cent of said rates for similar miles made by trail- 
 ers operated during said months. 
 
 The sum so deducted each month shall ! be placed to 
 the credit of the Maintenance, Depreciation and Renewal 
 Account and shall not thereafter be expended for any 
 other purpose whatever. The sum so set aside shall if 
 not needed for immediate maintenance or renewals be 
 accumulated, and may from time to time be invested in 
 the bonds of the company or in the payment of its float- 
 ing indebtedness, to the extent that the same form part 
 of the capital value of the company, as that term is de- 
 fined in Section 16 hereof, and to facilitate the invest- 
 ment of said fund in such bonds the company shall in 
 any bonds hereafter issued by it stipulate the call price 
 and conditions provided in Section 16 hereof, but if the 
 amount so invested or paid is at any time needed for 
 maintenance and renewals the company may for that 
 purpose issue new mortgage bonds or incur new floating 
 indebtedness to the amount of such investment or pay- 
 ment with the interest that would have accrued thereon, 
 winch new bonds or floating indebtedness shall become 
 part of the capital value of the company, as that term is 
 defined in Section 16 hereof. 
 
 Sec. 21. The amounts per car mile allowed in Sec- 
 tion 19 hereof, may be increased or decreased from time 
 to time toy agreement between the city and the company 
 so as to enalble the company to meet the legitimate ex- 
 penses of operation, insurance, accident and damage 
 claims, and to prevent or make good any deficit on ac-
 
 345 
 
 count of such operating expenses, and also the amount 
 required by Section 20 hereof to be set aside for main- 
 tenance, renewals and repairs may be similarly increased 
 or decreased by agreement and in the event of disagree- 
 ment any such increase or decrease in either car mile 
 allowance shall be submitted to 'arbitration. Any surplus 
 in the hands of the company at the expiration of any 
 period of six (6) months remaining unexpended for op- 
 erating expenses, as hereinbefore provided, out of the car 
 mile allowance provided by Section 19 hereof, exclusive 
 of the amount required to be credited to the maintenance 
 and renewal account by Section 20 hereof, shall be placed 
 to the credit of the interest fund hereinbefore described. 
 
 The intent hereof with regard to the sum authorized 
 by Section 20 hereof to be set aside for maintenance, 
 depreciation and renewal is to enable the company to 
 maintain, renew, replace, preserve and keep its railway 
 system and property, and every part thereof, and all 
 extensions, betterments and permanent improvements 
 hereafter made, pursuant hereto, in good condition, 
 thorough repair and working order, the standard of such 
 condition, repair and working order being an average 
 for the entire system of 70 per cent of its reproduction 
 value, and the car mile allowance provided by Section 
 20 hereof for the purpose of maintenance and renewal 
 shall not at any time be diminished unless the value of 
 the property of the company and the amount accumu- 
 lated in the maintenance and renewal fund, and invested 
 as is provided 1 in Section 20 hereof, aggregate more than 
 70 per cent of the reproduction value of the said entire 
 system. 
 
 Sec. 22. The maximum rate of fare for a single con- 
 tinuous ride within the present limits of the city of 
 Cleveland in one direction, over any route of said com- 
 pany shall be four cents (4c) cash fare, seven tickets
 
 346 
 
 for twenty-five cents (25c), one cent (Ic) transfer, no 
 rebate and including said maximum rate the following 
 schedule or scale of fares is hereby established: 
 
 (a) Four cents cash fares, seven tickets for twenty- 
 five cents (25c), one cent (Ic) transfer, no rebate. 
 
 (b) Four cents (4c) cash fare, seven (7) tickets for 
 twenty-five cents (25c), one cent (Ic) transfer, one cent 
 (Ic) rebate. 
 
 (c) Four cents (4c) cash fare, three (3) tickets for 
 ten cents (lOc), one cent (Ic) transfer, no rebate. 
 
 (d) Four cents (4c) cash fare, three (3) tickets for 
 ten cents (lOc), one cent (Ic) transfer, one cent (Ic) 
 rebate. 
 
 (e) Three cents (3c) cash fare, one cent (Ic) trans- 
 fer, no rebate. 
 
 (f) Three cents (3c) cash fare, one cent (Ic) trans- 
 fer, one cent (Ic) rebate. 
 
 (g) Three cents (3c) cash fare, two (2) tickets for 
 five cents (5c), one cent (Ic) transfer, no rebate. 
 
 (h) Three cents (3c) cash fare, two (2) tickets for 
 five cents (5c), one cent (Ic) transfer, one cent (Ic) 
 rebate. 
 
 (i) Two cents (2c) cash fare, one cent (Ic) transfer, 
 no rebate. 
 
 (j) Two cents (2c) cash fare, one cent (Ic) trans- 
 fer, one cent (Ic) rebate. 
 
 Each of the foregoing rates of fare, when in force, 
 shall be the rate of fare for a single continuous ride 
 within the present city limits of the city of Cleveland 
 in one direction, over any route of said company wheth- 
 er enumerated in Section 2 hereof or not; and when any 
 of the foregoing rates of fare is in force with regard 
 to which a ticket rate is provided, the company shall sell 
 on all of its cars, at all times reissuable tickets at the 
 rate provided, each of which tickets shall entitle the
 
 347 
 
 holder to one such ride. At all times any passenger de- 
 manding a transfer ticket at the time of paying such 
 cash or ticket rate of fare as shall then be in force, shall 
 be entitled under the provisions of the rate of fare then 
 in force as to transfers to transfer from the route on 
 which he shall have paid such fare, to any other route 
 of said company, except in a substantially opposite di- 
 rection on a route parallel or substantially parallel 
 thereto, and to ride continuously to any point upon such 
 second route within the limits of the city of Cleveland, 
 provided the transfer to a car upon such second route 
 within five (5) minutes after leaving the car upon which 
 he shall have paid fare, or to the first car of such company 
 passing such transfer point upon such second route, and 
 at the first point of intersection of said routes reached by 
 the car upon which he shall have paid fare. If cars upon 
 two or more routes are operated regularly along the same 
 street, passengers who are able to reach their destination 
 by one of said routes, without transfer to another of said 
 routes, shall board a car upon the route reaching such des- 
 tination, and shall not be entitled to transfer thereto from 
 any other route. 
 
 Any passenger transferring to a car upon the East 
 55th Street cross town line of said company, or upon 
 its cross town line in East 105th Street, Woodhill Road, 
 and East 93rd Street, or upon its cross town line in W. 
 65th Street, shall, upon demand at the time of present- 
 ing, within the time herein provided, a transfer ticket 
 to such cross town line, from any intersecting line of 
 said company, be entitled, without additional charge, to 
 transfer to any other route of said company intersecting 
 such cross town line, and to ride to any point upon such 
 intersecting route, provided he transfer to a car upon 
 such last mentioned route within five (5) minutes after
 
 348 
 
 leaving sucli cross town car, or to the first regular car 
 upon such last mentioned route. 
 
 The company shall not be required, however, to fur- 
 nish a round trip for a single fare, nor to carry any 
 passenger to any point upon its railway and from such 
 point to the vicinity of his starting point for a single 
 fare, and the company may, subject to the approval of 
 the city Council as hereinbefore provided, make such 
 reasonable regulations, not inconsistent with the provi- 
 sions of this ordinance, as may be necessary to prevent 
 misuse of transfers. 
 
 Any child under six (6) years of age, accompanied 
 by a person paying fare, shall be carried free. Two per- 
 sons under six (6) years of age, w^hen accompanied by 
 a passenger paying fare, shall be carried for a single 
 fare. 
 
 The company may make and enforce proper and rea- 
 sonable rules and regulations relating to the collection 
 of fares and the issuance and acceptance of transfers 
 upon the several routes of the company, subject, how- 
 ever, to the approval of the city Council. 
 
 Sec. 23. At once upon the taking effect of this ordi- 
 nance the company shall put into operation the rate of 
 fare stipulated in paragrah "e" of Section 22 hereof, to 
 wit, three cent cash fare and one cent charge for a trans- 
 fer, and said rate of fare shall continue in force for 
 eight months from the taking effect hereof; provided 
 that the company shall have installed 450 pay-enter cars 
 within five months from the taking effect hereof, as is 
 provided in Section 8 hereof; otherwise said initial rate 
 of fare shall continue in force for three months beyond 
 the completion of the installation of said 450 pay-enter 
 cars. At the termination of said eight months, or such 
 longer period as may be rendered necessary by the fore- 
 going provision, if the amount in the interest fund, less
 
 349 
 
 accrued proportionate payments to be made therefrom, 
 shall be less than Five Hundred Thousand Dollars 
 ($500,000), the company shall install the next higher 
 rate of fare provided in Section 22 hereof, unless in the 
 opinion of the company a rate of fare higher than the 
 next higher to the rate in force during the said initial 
 period shall be necessary to restore the balance in the 
 interest fund and to provide for current disbursements 
 therefrom as hereinbefore provided, in which event, with 
 the consent of the city, the company may install any 
 rate of fare not higher than the maximum provided in 
 Section 22 hereof; or upon failure of the city to agree 
 thereto, the question may be submitted to arbitration as 
 hereinbefore provided, and the rate of fare so installed 
 after the termination of said initial period, whether the 
 next higher rate or any rate not higher than the max- 
 imum installed with the consent of the city, or 'by award 
 of the board of arbitration, shall continue in force for 
 six months. Thereafter the rate of fare shall be changed 
 from time to time as follows : 
 
 Whenever the amount credited to the interest fund, 
 less the proportionate accrued payments to be made 
 therefrom, shall be less than Five Hundred Thousand 
 Dollars ($500,000) by the amount of $200,000 this shall 
 be prima facie evidence of the necessity of raising the 
 rate of fare to the next higher rate on the scale provid- 
 ed in Section 22 hereof. 
 
 Whenever the balance in the interest fund, less pro- 
 portionate accrued payments to be made therefrom, shall 
 be more than Five Hundred Thousand Dollars (#500,- 
 000) by the amount of f 200,000 it shall be prima facie 
 evidence of the necessity of lowering the rate of fare to 
 the next lower rate on the scale provided in Section 22 
 hereof.
 
 350 
 
 If at any time, either the city or the company shall 
 be of opinion that the fare should be increased or de- 
 creased otherwise than as is hereinbefore provided, such 
 party may give written notice to the other of its opinion, 
 stating the increase or decrease desired. If this is assent- 
 ed to, the change shall be made. In case of disagreement, 
 the question of increase or decrease, and the rate to be 
 fixed shall at once be submitted to arbitration, as is pro- 
 vided in Section 11 hereof, and the rate fixed by the 
 award of such board of arbitration, not exceeding the 
 maximum rate of fare provided 1 for by this ordinance, 
 shall be at once installed. 
 
 Wherever in this section or in this ordinance it is pro- 
 vided that in determining the amount in the Interest 
 Fund deductions shall be made for "accrued proportion- 
 ate payments to be made therefrom," such deductions 
 shall be made as follows: 
 
 The total amount to be deducted during the year shall 
 be the aggregate amount of interest and dividend pay- 
 ments provided by section 16 hereof together with all 
 taxes, and the said aggregate shall be deducted at the 
 following rates : 
 
 For January Seven per cent. 
 
 For February Six per cent. 
 
 For March Seven per cent. 
 
 For April Eight per cent. 
 
 For May Nine per cent. 
 
 For June Nine per cent. 
 
 For July Ten per cent. 
 
 For August Ten per cent. 
 
 For September Nine per cent. 
 
 For October Nine per cent. 
 
 For November Eight per cent. 
 
 For December Eight per cent.
 
 351 
 
 Sec. 24. The company may transport along and upon 
 its lines in suitable cars such materials, supplies, appli- 
 ances and tools as it may need for the construction, 
 maintenance and operation of its road. It may carry 
 upon its passenger cars or upon other cars mail for the 
 government of the United States. It may operate funeral 
 cars, observation cars, express passenger service and 
 other special cars at rates to be fixed from time to time 
 by the Council of the city of Cleveland not lower than 
 the rate in force for the carriage of passengers from 
 time to time as is provided 1 by the terms of this ordi- 
 nance. The Company shall also operate hospital and sup- 
 ply cars for the city, and such other cars for exclusively 
 municipal purposes as the city shall direct, and the city 
 shall furnish and maintain such cars and shall pay the 
 cost of operating such cars, to wit, the wages of all em- 
 ployes of the Company in charge thereof, plus the cost 
 of current, but exclusive of any contribution for fixed 
 charges or for track maintenance or renewal. The trans- 
 portation of materials, supplies, appliances, tools, and 
 mail and the operation of special cars shall not be per- 
 mitted to interfere with or delay the carriage of pas- 
 sengers and shall at all times be subject to regulation 
 by the Council. The car miles operated by the company 
 in transportation of city cars, materials, supplies, ap- 
 pliances and tools shall not be counted in the car miles 
 made for the purposes of Sections 19 and 20 hereof. 
 
 Sec. 25. The cars of the company shall be operated 
 to Garfield Park on its Broadway line, and passengers 
 shall be carried to and from said point at the same rate 
 of fare charged under the provision of this ordinance 03" 
 the Company upon its lines within the limits of the City 
 of Cleveland. By the acceptance of this ordinance as 
 hereinafter provided, the Company agrees to accept an 
 ordinance authorizing it to extend its Lorain Street lino
 
 352 
 
 to the present limits of the City of Cleveland, consents 
 of property owners having been presented, for the pas- 
 sage of such an ordinance, and immediately thereafter 
 to construct and extend its Lorain Street line to said 
 city limits, and to operate said line to the present limits 
 of the Citj T of Cleveland at the rate of fare from time 
 to time in force under the provisions of this ordinance 
 within the limits of the City of Cleveland. Provided, that 
 in lieu of accepting such ordinance and building such 
 extension, the Company shall have the right, with the 
 consent of the city, to make any reasonable arrangement 
 for the operation of its cars to the city limits on Lorain 
 Street, over existing tracks therein. 
 
 Sec. 26. The salaries of persons employed by the 
 Company and receiving compensation at the rate of f 1,- 
 500 per annum or more shall not be in excess of those 
 paid for similar work by other properties of the same 
 relative size. 
 
 Sec. 27. The words "extensions, betterments and per- 
 manent improvements" as used in this ordinance, in con- 
 tradistinction from repairs, maintenance, renewals and 
 replacements of property, shall be held to mean the ac- 
 quisition, construction and equipment of additional lines 
 of street railway, power houses, switches, sidings, car 
 houses, shops, rolling stock, machinery and other prop- 
 erty or additions to existing equipment or difference be- 
 tween cost of new sources of power, or new methods of 
 propulsion and the cost of the source of power or method 
 of propulsion replaced, if new at the time of replace- 
 ment, and all expenses incident to such construction and 
 acquisition, and also wherever any property of the com- 
 pany is replaced by other property at a greater cost than 
 would be the first cost of such property, if purchased at 
 the time of replacement, then such excess cost shall be 
 deemed an extension, betterment or permanent improve-
 
 353 
 
 ment within the meaning of those words as used in this 
 ordinance, and in the event of any disagreement between 
 the company and the city with regard thereto a board 
 of arbitration selected as provided in Section 11 hereof 
 shall have power to determine under the provisions of 
 this section what proposed expenditures by the company 
 are for extensions, betterments and permanent improve- 
 ments. 
 
 Sec. 28. Whenever any extensions, betterment or per- 
 manent improvement is proposed by the company other- 
 wise than of the kind and subject to the limitations con- 
 tained in Section 20 hereof, estimates of the cost thereof 
 and plans and specifications therefor, shall be filed with 
 the City of Cleveland by the company. 
 
 When such extensions, betterments or permanent im- 
 provements have been approved by the Council such ex- 
 tensions, betterments and permanent improvements shall 
 be made. If the company acting in good faith and using 
 all usual means can procure the necessary money by the 
 sale of stocks or bonds at par, or 'by an increase of float- 
 ing debt, and the capital value, as that term is defined 
 by Section 16 hereof, shall be increased as provided in 
 Section 16 hereof, and the company shall be entitled to 
 have payments made to it thereon out of the interest 
 fund at the rate of six (6) per cent per annum, payable 
 quarterly, if the expense is met by the issuance of stock, 
 or at the rate of interest borne by the bonds or floating 
 debt if the expense is met by bond issue, or increased 
 floating debt, at a rate not exceeding that hereinbefore 
 provided. 
 
 Whenever such extension, betterment or permanent 
 improvement is proposed, the City Street Railroad Com- 
 missioner shall have the right to employ such assistance 
 as he shall deem necessary for the purpose of checking
 
 354 
 
 over such estimates; and if the work of constructing 
 such extensions, betterments or permanent improv- 
 ements is undertaken, he shall have the right to employ 
 such assistance as he shall deem necessary for the pur- 
 pose of checking material, lafoor or other costs in the 
 supplying of such extensions, 'betterments or permanent 
 improvements, and the company shall pay all bills for 
 such assistance and services approved by the City Street 
 Railroad Commissioner, provided that such bills shall 
 be subject to the approval of the city Council, and shall 
 not in the aggregate exceed one (1) per cent of the cost 
 of the proposed extensions, betterments or permanent 
 improvements, which sum, if the extension, betterment 
 or permanent improvement is made, shall be included in 
 the actual cost thereof; or, if the extension, betterment 
 or permanent improvement is not made, the cost thereof, 
 not exceeding one (1) per cent of the estimated cost 
 thereof, shall be paid by the company as an expense out 
 of the interest fund. 
 
 Sec. 29. The company alone may propose extensions, 
 betterments or permanent improvements. 
 
 Nothing shall be added to the capital value provided 
 in Section 16 hereof on account of any extension, better- 
 ment or permanent improvement made by the company 
 without the approval of the city. 
 
 Sec. 30. During the continuance of this grant the 
 company may maintain the existing suburban lines op- 
 erated T>y it at the time of the passage hereof, but the 
 cost of the construction of extensions, betterments and 
 improvements upon existing suburban lines except to 
 the extent of the increased cost of replacing property 
 as defined in Section 27 hereof, or of the building and 
 construction of additional suburban lines shall not be 
 included in the capital value of the company as fixed by 
 Section 16 hereof without the consent of the city, which
 
 355 
 
 consent shall be secured in the manner provided in Sec- 
 tion 28 hereof for the making of extensions, betterments 
 or permanent improvements upon the property of the 
 company within the city. 
 
 The company shall perform all existing contracts be- 
 tween it and any municipal corporations, or boards of 
 county commissioners under which suburban lines are 
 now operated, but shall not increase the service above 
 or reduce the fare "below the requirements of such ex- 
 isting contracts, and in the event of any dispute between 
 the city and the company as to the requirements of such 
 existing contracts, the dispute shall be submitted to ar- 
 bitration, if the consent of the municipal corporation or 
 other public authority interested can be obtained. In the 
 event of such arbitration the city shall appoint one arbi- 
 trator and the suburban authority one arbitrator; the 
 third shall be appointed as provided in Section 11 here- 
 of. Otherwise such dispute shall be litigated and the city 
 shall have the right to be represented by counsel. 
 
 The company may accept new grants for the operation 
 of su'burban lines, or renewals of existing grants, "but 
 after the acceptance of such grants or renewal of exist- 
 ing grants, the amount deducted from the gross receipts 
 of the company for car miles made in the operation of 
 such new or renewal grant, under the provisions of Sec- 
 tions 19 and 20 hereof, shall in no event exceed the gross 
 receipts made in such operation of such new or renewal 
 grant, less the distributive share of the aggregate taxes 
 of the company, which should be paid upon the property 
 operated under such new or renewal grant, and the car 
 mileage allowance for expense of operation and mainten- 
 ance within the city provided by Sections 19 and 20 here- 
 of shall not be increased on account of any deficiency 
 therein. The gross receipts of operation of any such new 
 or renewed suburban grant shall be the excess of the
 
 356 
 
 total receipts of the line above the full city rate for all 
 passengers using any part of the line within the city 
 limits. But should later operation under such new grants 
 or renewal grants show a surplus of gross receipts of the 
 company for car miles made in the operation of such new 
 or renewal grant over the deduction from gross receipts 
 authorized to be made under the provisions of this ordi- 
 nance, the company may use this surplus to reimburse 
 itself for any earlier deficiency, and when this has been 
 accomplished the subsequent receipts shall be used as 
 provided in this ordinance, and if the Council approve, 
 the capital value of the Company shall 'be increased by 
 the then value of the property used in any such exten- 
 sions, betterments, or permanent improvements which 
 have been so constructed. 
 
 The right so to include such property in capital value 
 and the amount to be so included shall be determined by 
 agreement between the city and the company, and shall 
 not be subject to arbitration. 
 
 Sec. 31. During the continuance of this grant the 
 company shall carry on its cars, free of charge, all po- 
 licemen and firemen of the city of Cleveland, in uniform 
 and on duty, but shall otherwise give no free passes or 
 free transportation unless otherwise required by law 
 except to motormen, conductors and inspectors of the 
 company, in uniform, and the company shall have the 
 right to furnish to its other employes, except employes 
 in the general office, free transportation while on duty 
 or going to or returning from work the cost of the same 
 to be charged to operation. The company shall, by the 
 adoption of all reasonable protective measures, and by 
 necessary supervision of its employes and accounting 
 force provide for the collecting of fares due the company 
 from passengers. If at any time the City Street Rail- 
 road Commissioner notifies the company that in his
 
 357 
 
 judgment any laxity, carelessness or inefficiency exists 
 in the matter of collecting the revenue of the company, 
 or of permitting free transportation in any way, or any 
 wastefulness in the purchase of material, or employment 
 of persons, or their compensation, said commissioner 
 shall have the right to employ such assistance as he may 
 need to determine the facts, and the company shall pay 
 the cost of all such assistance, subject to the limitations 
 imposed by section 10 hereof. If, as the result of such 
 investigation, it is found that any such failure to collect 
 revenues exists, it shall be at once corrected. If there be 
 disagreement between the city and the company as to 
 the result of such investigation or as to the efficiency 
 of any corrective applied by the company, and the ques- 
 tion having been submitted to arbitration under the pro- 
 visions of Section 11 hereof, such board finds such fail- 
 ure to exist, or not to have been corrected, the reduction 
 in the rate per cent of interest payments, as provided in 
 Section 14 hereof, may be made and enforced by the board 
 of arbitration until the failure is corrected. 
 
 Sec. 32. The company, by the acceptance of this ordi- 
 nance, agrees to grant to the city and the city hereby re- 
 serves to itself the right whenever the city shall have 
 legal power so to do, upon giving at least six (6) 
 months' previous notice in writing of its intention so 
 to do, to purchase and take over the entire street rail- 
 way system of the company, including all property then 
 existing which now constitutes the street railway system 
 in the possession of and operated by The Cleveland Rail- 
 way Company, with all renewals, improvements, better- 
 ments and repairs thereon, and additions thereto, and 
 including all the property, grants, franchises, rights and 
 claims of every kind, character and description then 
 owned by said company. In case the city shall purchase 
 and take over the street railway property of the com-
 
 358 
 
 pany, as is in this ordinance, provided, then it shall pay 
 for the same the capital value of said property, as fixed 
 by Section 16 hereof, plus 10 per cent thereof, the city 
 at the time of such purchase assuming and agreeing to 
 pay in addition thereto all the obligations, indebtedness 
 and liabilities of said company, and all liens other than 
 bonded indebtedness upon its property then existing, 
 which bonded indebtedness the city shall, at the time of 
 any such purchase provide for by assumption if the law 
 authorizing such purchase permits or by payment if 
 the law so authorizes at the time, and under the pro- 
 visions of the bonds they are callable or by taking the 
 property subject thereto, if that be the mode provided 
 by law for dealing with such existing bonded indebted- 
 ness in making such purchase. To the extent that the 
 city takes the property subject to, assumes or pays either 
 floating or bonded indebtedness the amount thereof shall 
 be deducted from capital value before the addition of the 
 10 per cent hereinbefore provided in determining the 
 price to be paid by the city. Upon giving such notice in 
 writing to the company by the city, as is provided in 
 Section 32 hereof, the law then permitting such pur- 
 chase, of the exercise of the option to purchase herein 
 given, the company shall, and hereby agrees that it will 
 as soon thereafter as the law will permit, execute and 
 deliver to the city a good and sufficient deed, conveyance 
 and assignment, conveying a good marketable title to 
 said railways, grants, property and franchises then held, 
 including cash on hand and in the interest fund, less 
 enough to pay dividends at the rate of 6 per cent to date, 
 subject, however, to all existing liens, indebtedness, ob- 
 ligations and liabilities of said company, and upon the 
 delivery of said deed, conveyances and assignment, the 
 city shall pay said purchase price as hereinbefore pro-
 
 359 
 
 vided and execute all papers necessary to carry into ef- 
 fect the terms of such purchase. 
 
 The company agrees that to the extent that its cur- 
 rent obligations, indebtedness and liabilities then liqui- 
 dated, except for extensions, betterments and permanent 
 improvements made in accordance with the terms of this 
 ordinance, do at the time of any such purchase exceed 
 a sum equal to ten per cent (10 per cent) of the gross 
 receipts of the company from all sources for the next 
 preceding calendar year such excess shall be deducted 
 from the capital value in determining the price to be 
 paid by the city. 
 
 Sec. 33. The company, by the acceptance of this or- 
 dinance, does grant to the city, and the city hereby re- 
 serves to itself the right from and after the 1st day of 
 January, 1918, to designate any firm, person or corpor- 
 ation having lawful authority to acquire, own and op- 
 erate street railways in the City of Cleveland (herein 
 called the licensee) who or which shall have the right 
 to purchase the street railway system, property and 
 rights of the company in the same manner as the city 
 hereunder has the right to purchase the same, subject 
 to the conditions that the licensee agrees to accept a 
 smaller return by at least one-quarter of one per cent 
 upon the portion of capital value described in Paragraph 
 (c) of Section 16 hereof than the company is then en- 
 titled to receive, and shall purchase the same property 
 which the city has herein reserved the right to purchase 
 in Section 32 hereof; that the price to be paid therefor 
 by the said licensee shall be the price at which it is pro- 
 vided in Section 32 hereof that the city may acquire the 
 property, and that in so acquiring the property, said 
 licensee shall agree to hold the same, subject to all the 
 terms of this ordinance, including as a valid and bind- 
 ing condition the right of the city to purchase the same
 
 360 
 
 as hereinbefore provided, and the right of the city there- 
 after to designate any other licensee to acquire and hold 
 the same, as is hereinbefore provided, and upon the des- 
 ignation of any such licensee by the city, the same notice 
 shall be given to the company as is herein provided to be 
 given in the event of the city exercising the option re- 
 ferred to in Section 32 hereof, and the same mode of 
 transfer as is herein provided in case of purchase by the 
 city shall apply to the case of purchase by such licensee. 
 The right of the licensee of the city to acquire the street 
 railway system, rights and property by purchase, under 
 the provisions of this ordinance, shall in no way 1>e im- 
 paired by any lack of power or authority on the part of 
 the city itself to acquire the said street railway system, 
 rights and property, for municipal operation and use, or 
 otherwise. 
 
 Before any such licensee as is herein provided shall 
 be designated, the city shall fix a time for the receipt of 
 bids and shall give thirty days' public notice thereof. At 
 the time appointed proposals shall be filed, the proposal 
 of any applicant other than the company being accom- 
 panied by $50,000.00 in money as a guarantee of its 
 good faith. If no proposal is filed by the company it shall 
 be deemed to propose the rate of return then authorized. 
 Should the company file a proposal lower than its then 
 authorized rate, such proposal being as low as any other 
 filed, the same shall be accepted and the rate therein 
 offered shall become the authorized rate of the return 
 unless (1) no other proposal be filed, or, (2) another 
 proposal having been filed and a license designated, no 
 purchase is made by such licensee thereunder, in either 
 of which events the proposal of the company shall be dis- 
 regarded and no change in the rate of return shall be 
 required by reason thereof. All proposals received shall 
 be opened at the hour fixed, and thereafter the council
 
 361 
 
 may designate as licensee any bidder whose proposal is 
 in accordance with the conditions hereinbefore set forth. 
 Should the city determine not to designate such licensee 
 or should no proposal complying with the conditions 
 hereinbefore provided be received, the city shall not again 
 give notice of the receipt of proposals within six months 
 thereafter. Should the city designate such licensee and 
 the bidder so designated fail to acquire the property and 
 to comply with all the conditions of such acquisition as 
 stipulated by this ordinance within thirty days after the 
 expiration of the six months notice hereinbefore provided, 
 unless prevented by bona fide legal proceedings over 
 which he has no control, the city shall declare such fail- 
 ure by resolution of council and upon the passage of such 
 resolution the city shall out of the $50,000.00 deposited 
 by such defaulting bidder pay to the company any loss 
 or expense which, in the opinion of the council, has been 
 incurred 'by the company in regard to the filing of pro- 
 posals or bids, and the balance of such deposit shall be- 
 come the property of the city and shall be deposited in 
 the city treasury to the credit of the general fund. 
 
 Sec. 34. Any such licensee in the acquisition of the 
 property under the provisions of section 33 hereof shall 
 pay the capital value of said property as fixed by section 
 16 hereof less bonded or floating debts paid or assumed 
 plus 10 per cent of the difference, and shall be under all 
 the obligations provided in section 32 hereof for the city, 
 in the event of purchase, by the city, except the limita- 
 tions as to the mode of payment, and shall assume and 
 agree to pay, in addition to the price stipulated, all the 
 obligations, indebtedness and liabilities of the company, 
 and all liens upon its property then existing other than 
 bonded indebtedness, which said bonded indebtededness 
 the said licensee may assume, it being understood that 
 the current obligations, indebtedness and liability of the
 
 362 
 
 company shall be limited as provided in section 32 here- 
 of, and that any excess thereof shall be deducted from 
 said purchase price. 
 
 Sec. 35. If at the time of the expiration of this grant, 
 the city shall not have exercised the right reserved to it 
 to purchase the said property or to nominate a purchaser 
 therefor, as is provided in sections 32 and 33 hereof, then, 
 and in either event the city reserves the right, provided 
 it then has the power so to do, to purchase said street 
 railroad, with all additions and extensions within the 
 then city limits, for such price and upon such terms as 
 may be agreed upon between the city and the company, 
 or upon their failure to agree, then for such price and 
 upon such terms as may be fixed by a board of arbitra- 
 tion, consisting of three persons, a majority of whom 
 shall decide all questions. 
 
 In case of arbitration in the purchase of said street 
 railroad, the city shall give written notice of its inten- 
 tion so to arbitrate, and name therein one arbitrator, 
 said notice being given not more than eighteen (18) 
 months, nor less than twelve (12) months prior to the 
 termination of this grant. The company shall name in 
 writing, within ten (10) days after receiving such notice 
 one arbitrator; the two within ten (10) days thereafter 
 shall agree upon a third arbitrator, or on failure of the 
 company so to name an arbitrator, or the two arbitra- 
 tors to name the third, within the times herein specified 
 the third arbitrator shall be appointed as provided in 
 section 11 hereof. 
 
 Sec. 36. The price which the city shall pay for such 
 street railroad under the provisions of section 35 hereof 
 shall be its value for street railroad purposes, and shall 
 be obtained as follows: The cost of reproduction shall 
 be estimated, and from this shall be deducted a reason- 
 able amount for depreciation. All the physical property 
 of every nature wdthin the then city limits used in the
 
 363 
 
 operation of the railroad shall be included in the valu- 
 ation. Separate itemized schedules, with values, shall 
 be made under the following titles: 
 
 1 Land. 2 Power plant, including land, building 
 and machinery. 3 All other buildings. 4 Tracks, in- 
 cluding poles, wires and appurtenances and also includ- 
 ing pavement to the extent paid for by the company and 
 included in capital value subsequent to the passage of 
 this ordinance. 5 Rolling stock. 6 Miscellaneous. 
 
 To the total valuation of the above items, if the city 
 shall exercise its right and purchase the property under 
 this section, ten (10) per cent shall be added. But in 
 arriving at said valuation no franchise or privileges 
 granted by the city shall be estimated or paid for nor 
 shall any payment be made for the amount in the in- 
 terest fund which shall then become the property of the 
 city of Cleveland. The city reserves the right to decline 
 to take the property at the valuation fixed by arbitration, 
 as above provided. 
 
 Sec. 37. If, at the expiration of this franchise, no ex- 
 tension or renewal thereof is granted by the city, and the 
 city does not then purchase the property, any person or 
 persons to whom a franchise may be granted to operate 
 a railroad over the then existing lines or any of them 
 or any part of them shall have the right and be under 
 obligation to purchase said railroad or such portion 
 thereof from its then owner upon the terms herein pro- 
 vided for purchase by the city by Sections 35 and 30 
 hereof. 
 
 Sec. 38. The company shall pay to the city three 
 thousand dollars ($3,000.00) per year for the use of the 
 city's tracks and appliances on the bridges, viaducts and 
 elsewhere the use of which is authorized in section 2 
 hereof, in the city, and shall renew, maintain and keep 
 said tracks and appliances in constant repair. The city
 
 364 
 
 reserves the right, however, from time to time to adjust 
 and fix the sum to 'be paid by the company for the uses 
 herein provided by ordinance of the council, the sum so 
 to be fixed, however, not to exceed at any time an amount 
 equal to six (6) per cent per annum upon the cost of the 
 tracks and appliances belonging to the city so used, 
 and imposing and continuing upon the company the obli- 
 gation of renewal, maintenance and repair above pro- 
 vided. Should the city at any time grant to any other 
 company the right jointly to use any of its tracks covered 
 by this section, the payments to be made to the city for 
 such use by the grantee herein and such other company 
 or companies, shall be apportioned by the city as the 
 council shall deem just, the aggregate sums paid not ex- 
 ceeding the maximum hereinbefore provided to be paid 
 by the company. 
 
 Sec. 39. Nothing in this ordinance contained shall 
 operate as an abridgment of the corporate rights or 
 powers of the company, nor of the discretion of its board 
 of directors in the selection of managers and employes or 
 any one performing any duties imposed upon the com- 
 pany and its officers by law, nor shall anything herein con- 
 tained by deemed a limitation upon the amount of capital 
 stock which shall be issued by the company or indebtedness 
 incurred by it. The capital valuation fixed by section 16 
 hereof is for the sole purpose of determining the return 
 to the company from the carriage of passengers and for 
 the purpose of fixing from time to time the rate of fare 
 and the price at which the purchase of the property of 
 the company may be made. 
 
 Sec. 40. The company shall have the right, whenever 
 the unexpired term of its franchises within the limits of 
 the city of Cleveland, shall be less than fifteen years, to 
 fix, charge and collect the maximum rate of fare pro- 
 vided in section 22 hereof, and during said period the
 
 365 
 
 right to control the schedule for the operation of cars 
 shall be in the company, and not in the city, except that 
 the city shall not be deemed to have surrendered its police 
 power to require such proper and reasonable service as 
 may be required by the needs of the traveling public. Dur- 
 ing such fifteen years, or any portion thereof, the company 
 shall continue to receive the sums provided by section 
 16 hereof out of the interest fund, and whenever the 
 amount credited to the interest fund, less the propor- 
 tionate accrued payments to be made therefrom shall be 
 more than $500,000.00 by the amount of $200,000.00, the 
 excess above $500,000.00 shall be by the company applied 
 to a reduction of the capital value of the company, as 
 that term is defined in section 16 hereof, as follows: 
 First, by the payment of any then outstanding floating 
 indebtedness of the company. Second, by the payment of 
 any bonds then outstanding of the company which can at 
 such time, according to the conditions of the mortgage 
 under which such bonds were issued, be paid. Third, by 
 creating a sinking fund to assist in securing a reduction 
 of capital value, such- sinking fund to be invested in 
 securities with the approval of the city and after the 
 payment of any such floating indebtedness or 'bonds, the 
 capital value, as that term is defined by section 16 here- 
 of, shall be reduced by the amount so paid, and there 
 shall be no payments made thereon out of the interest 
 fund. 
 
 In the event of the city exercising the right to purch- 
 ase the property of the company provided in section 32 
 hereof or designating a licensee as provided in section 33 
 hereof, during operation by the company in a period of 
 less than fifteen years franchise duration, as provided by 
 this section, the surplus earnings shall, as hereinbefore 
 provided first by deducted from the capital value, and 
 the price to be paid by the city, or the city's licensee,
 
 366 
 
 shall then be determined bj adding to the residue of 
 capital value after applying the payments and sinking 
 fund hereinbefore provided for the percentage thereof 
 provided in section 32 hereof, and should the city pass 
 a grant in renewal hereof during a period of less than 
 fifteen years franchise duration, such renewal grant shall 
 contain as the capital value of the company the capital 
 value set forth in section 16 hereof, increased as in this 
 ordinance provided and diminished by any reduction 
 thereof out of surplus earnings as is in this section pro- 
 vided. 
 
 Should the city exercise the right, reserved by section 
 
 35 hereof, to purchase the property at the expiration of 
 this grant or any renewal hereof, there shall be deducted 
 from the price to be paid, as determined under section 
 
 36 hereof, any sum deducted from capital value out of 
 surplus earnings accrued in any period of operation 
 under this section. 
 
 Sec. 41. At any time after the taking effect of this 
 ordinance the city shall have the right to pass an ordi- 
 nance in renewal of the rights hereby granted for such 
 period not less than fifteen years nor less than the then 
 unexpired term of this grant, as the city may by law be 
 authorized to make and upon the passage of any such 
 renewal ordinance, imposing upon the company no sub- 
 stantial burden as defined in section 43 hereof in addition 
 to those imposed in this ordinance, the company shall at 
 once accept the same, and upon its failure or refusal to 
 accept the same the provisions of section 40 hereof shall 
 cease to operate, and the city shall resume and have 
 unimpaired all the powers as to regulation of schedule 
 and operation provided by section 9 hereof, and the rates 
 of fare shall continue to be those fixed by the city council 
 or by arbitration, under various provisions of this ordin- 
 ance without reference to the provisions of section 40.
 
 367 
 
 Sec. 42. Should the duration of this grant or any 
 grant made in renewal hereof come to have less than 15 
 years unexpired time to run, and the company, under 
 the provisions of section 40 hereof, install the maximum 
 rate of fare, the council may still pass such renewal 
 grant as is herein provided, and the company shall con- 
 tinue under obligation to accept the same under the terms 
 and provisions of this section, and upon acceptance shall 
 become subject to the terms thereof as though it had not 
 operated under the provisions of section 40 hereof. 
 
 Sec. 43. Any ordinance passed in renewal hereof shall 
 be deemed not to impose any substantial burden upon 
 the company in addition to those imposed by this ordin- 
 ance, when such renewal ordinance is either identical in 
 terms with this ordinance, except as to the time of ex- 
 piration, or that the right reserved to the city in section 
 33 hereof may in such renewal ordinance be made con- 
 tinuously operative from and after January 1, 1918, or 
 differs from this ordinance in such particular only as 
 may be agreed upon between the city and the company. 
 
 Sec. 44. Should the city not have exercised the right 
 reserved to it in section 32 hereof by purchasing the 
 street railway property, on or before the first day of Jan- 
 uary, 1933, then on said first day of January, 1933, the 
 city having previously given one year's notice of its in- 
 tention to enforce this section, the line of street railroad 
 now known as the St. Glair Avenue line, beginning at W. 
 9th street and extendng through St. Glair avenue N. W. 
 and St. Glair avenue N. E. to East 105th street, with all 
 the physical property, rails, ties, poles, trolley, span, guy 
 and feed wires and other fixed appliances in place in 
 said St. Glair avenue N. W. and St. Glair avenue N. E. 
 shall upon the city tendering to the company the value 
 thereof, determined as provided in section 36 hereof, 
 plus 10$, be and become the property of the city of
 
 368 
 
 Cleveland, and. the operation of any grant or franchise 
 then in force with relation thereto shall cease and deter- 
 mine and the owning company shall have no right of any 
 kind with regard thereto. If on said 1st day of Jan- 
 uary, 1933, the city shall not have the right to own such 
 property, or having such right determine not to exercise 
 it, then the said property shall pass, upon making the 
 same payment therefor as is required from the city in 
 case it had and exercised the right to acquire this prop- 
 erty, to such person as the city council shall by resolu- 
 tion have designated to become the owner thereof, and the 
 vesting of this property in such person so designated 
 shall not be affected by any incapacity on the part of the 
 city, itself, to own such property, and in consideration 
 of the rights and privileges by this ordinance granted 
 to the company, the company does hereby agree that in 
 the event stipulated it will on said 1st day of January, 
 1933, execute all necessary deeds, covenants, assignments 
 and other documents which may be necessary to confer 
 upon the city or the city's licensee the absolute right, 
 title and interest in and to all the property described 
 in this section to be on said day so set over, transferred 
 and conveyed. 
 
 Sec. 45. In case of any failure of the company to do 
 and perform each and every one of the terms and condi- 
 tions herein stipulated to be performed by it, and failure 
 to comply with the general ordinances of the city of 
 Cleveland relating to street railroads now or hereafter 
 in force, and not inconsistent with the specific provisions 
 of this ordinance, and such failure shall continue for six 
 months after written notice to the company from the 
 city of its intention to exact a forfeiture by reason of 
 such failure, the company shall thereupon forfeit all and 
 singular the rights and privileges herein granted, and 
 thereafter all such rights and privileges shall cease, and
 
 369 
 
 such forfeiture shall be declared and enforced in the 
 manner provided in section 1891 of the Revised Ordin- 
 ances of the City of Cleveland of 1907. 
 
 Sec. 46. The acceptance of this ordinance by the com- 
 pany in the manner hereinafter provided and the ratifica- 
 tion thereof by the stockholders of the company prior 
 to February 10, 1910, and the taking effect of this ordin- 
 ance shall be and constitute a surrender, termination and 
 cancellation of all the grants and franchises of every 
 kind, character and description received, acquired or 
 owned by any of the companies required by this section 
 to sign the acceptance hereof, from the city of Cleveland 
 or from any other source of authority to operate the 
 street railroad system or any part thereof hereinbefore 
 mentioned, within the present limits of the city of Cleve- 
 land, and shall be a contract between the city of Cleve- 
 land and the Cleveland Railway Company, a contract be- 
 tween The Cleveland Railway Company and The Forest 
 City Railway Company, The Municipal Traction Com- 
 pany, The Low Fare Railway Company, and The Neutral 
 Street Railway Company, superseding and cancelling all 
 other relations between them except such as passed title 
 to said The Cleveland Railway Company or The Cleveland 
 Electric Railway Company, and for and in consideration 
 of the privileges granted by this ordinance, The Cleve- 
 land Railway Company by the acceptance hereof shall as- 
 sume and carry out, pay and perform all of the obliga- 
 tions, covenants and conditions by this ordinance im- 
 posed upon the company, and shall extend to, respect 
 and carry into effect all rights reserved by the city of 
 Cleveland or granted to the city of Cleveland by the 
 company by the terms hereof, or granted to or imposed 
 upon the company by the terms hereof; and such accep- 
 tance shall be in writing, filed with the city clerk within 
 five days after the passage of this ordinance, in tho
 
 370 
 
 following form, and such acceptance shall take effect 
 upon the taking effect of this ordinance: 
 
 "Cleveland, Ohio, 1909. 
 
 "The Cleveland Railway Company hereby accepts the 
 
 terms of Ordinance No , passed on the day 
 
 of , 1909, by the council of the city of Cleve- 
 land, granting a renewal of the street railway rights of 
 The Cleveland Railway Company, fixing the terms and 
 conditions of such renewal grant, changing the rates of 
 fare, regulating transfers and terminating existing grants, 
 and as consideration moving from The Cleveland Rail- 
 way Company to The City of Cleveland for the passage 
 of such ordinance and the rights thereby granted by the 
 city of Cleveland to said company, The Cleveland Railway 
 Company does hereby surrender and terminate all its 
 grants and franchises of every kind, character and de- 
 scription, received, acquired or owned by it, or its pre- 
 decessors, from the city of Cleveland, or any other source 
 of authority to operate street railways within the present 
 limits of the city of Cleveland, and the Cleveland Rail- 
 way Company, for said consideration and for the surren- 
 der hereinafter specified by The Low Fare Railway Com- 
 pany, The Forest City Railway Company, The Municipal 
 Traction Company and The Neutral Street Railway Com- 
 pany, does hereby assume, and agree, to carry out, pay, 
 and perform, all the obligations, covenants and condi- 
 tions of said ordinance, and to extend to, respect and 
 carry into effect all rights reserved therein by the city 
 of Cleveland or granted to said city by The Cleveland 
 Railway Company by the terms thereof; and as consider- 
 ation moving from The Cleveland Railway Company for 
 the surrender by The Low Fare Railway Company, The 
 Forest City Railway Company, The Municipal Traction 
 Company and The Neutral Street Railway Company, of 
 all claims, demands and rights against The Cleveland
 
 371 
 
 Railway Company of, in or to any of the properties, lines 
 or grants referred to in this ordinance, The Cleveland 
 Railway Company hereby assumes and agrees to pay the 
 debts now existing of said The Forest City Railway Com- 
 pany, The Municipal Traction Company and The Neutral 
 Street Railway Company, as specified in said ordinance; 
 and in consideration thereof said The Low Fare Railway 
 Company, The Forest City Railway Company, The Muni- 
 cipal Traction Company and The Neutral Street Rail- 
 way Company, hereby release said The Cleveland Rail- 
 way Company from all claims and demands whatsoever, 
 and surrender to it all claim to or rights which they or 
 either of them may have in or to any of the property, 
 lines or routes referred to in the above ordinance or in 
 the hands of the receiver or against one another and agree 
 to execute and deliver to the Cleveland Railway Com- 
 pany all such instruments as may be necessary to effectu- 
 ate the same. 
 
 The Cleveland Railway Company. 
 
 By President. 
 
 Secretary. 
 
 The Low Fare Railway Company. 
 
 By President. 
 
 . Secretary. 
 
 The Forest City Railway Company. 
 
 By President. 
 
 Secretary. 
 
 The Municipal Traction Company. 
 
 By President. 
 
 Secretary. 
 
 The Neutral Street Railway Company. 
 By President. 
 
 . SerrelMi'v.
 
 372 
 
 Sec. 47. The purpose of this ordinance is to establish 
 and settle the relations between the city of Cleveland 
 and the Cleveland Railway Company by a contract which 
 will secure to The Cleveland Hallway Company unim- 
 paired the capital value described in section 16 hereof 
 and the rates of return thereon provided in said section, 
 and which will also secure to the city of Cleveland ade- 
 quate and efficient service at the cost thereof, not exceed- 
 ing the maximum rate of fare specified in section 22; 
 and the provisions of this ordinance in respect to the 
 fixing, from time to time, of rates of fare to be charged 
 by the company, the provisions in respect to the ascer- 
 tainment of the value of the property of the company 
 and the items from time to time constituting the capital 
 value thereof, the provisions in reference to the designa- 
 tion of the City Street Railroad Commsisioner and the 
 duties to be performed by him, the provisions with re- 
 spect to the right and power of the city, through the City 
 Street Railroad Commissioner or otherwise, to be in- 
 formed by inspection of the 'books, papers, documents, 
 vouchers and property of the company as to the value of 
 said property and the cost of service, and the provisions 
 in respect to the acquisition of the property of the com- 
 pany by the city or by a purchaser designated by the 
 city therefor, as set forth in the several sections of this 
 ordinance dealing with said subjects, are mutually un- 
 derstood and declared to be in their substance material 
 to the accomplishment of the aforesaid purposes for 
 which this contract is made; but nevertheless, in order 
 to avoid an entire failure of this grant in consequence of 
 invalidity of any of the aforesaid provisions, it is further 
 provided as follows: 
 
 1. If any material part of the provisions of this or- 
 dinance in respect to the fixing, from time to time, of 
 the rates of fare to be charged by the company, includ-
 
 373 
 
 ing the submission of such rates of fare to arbitration 
 in case of disagreement between the parties, shall be ad- 
 judged to be invalid, then, except as provided in section 
 40, all of the provisions hereof respecting the increase 
 or decrease of fare, after the expiration of the period 
 during which the initial rate of fare is to continue in 
 force as prescribed by section 23, shall be abrogated and 
 in lieu thereof the council of the city of Cleveland shall 
 have power, from time to time, to fix by ordinance tin- 
 rate of fare to be charged by the company for the trans- 
 portation of passengers, not exceeding the maximum rate 
 specified in section 22; but the council shall not at any 
 time decrease the rate of fare unless there shall then be 
 a sum exceeding |500,000 in the interest fund, and any 
 rate of fare so fixed by the council shall not impair the 
 ability of the company to earn sufficient money to meet 
 the payments provided for in sections 16 and 18 hereof 
 after paying operating expenses and maintenance and 
 such other allowances for depreciation and renewals 
 as may from time to time be made pursuant to the pro- 
 visions of this ordinance. 
 
 2. If any material part of the provisions of this or- 
 dinance providing for the settlement or decision by arbi- 
 tration of questions other than the increase or decrease 
 of the rate of fare which may arise between the city and 
 the company shall be adjudged to be invalid, then as to 
 any such question thereafter arising between the parties, 
 and which by the terms hereof is to be so submitted to 
 arbitration, the council of the city of Cleveland shall be 
 substituted for the board of arbitration by this ordinance 
 provided, and the said council shall be empowered to de- 
 termine such question in accordance with the rules and 
 principles herein prescribed so far as the same may be 
 applicable and its action shall be binding on both parties, 
 unless the same shall be annulled or modified by a court
 
 374 
 
 of competent jurisdiction, and if the question involved 
 be in reference to service, the company shall at once in- 
 stall the kind of service directed by the council until such 
 court shall otherwise order. 
 
 3. If at any time the provisions of this ordinance for 
 the designation of a city street railroad commissioner 
 shall be held invalid or if at any time there shall be no 
 city street railroad commissioner, the city may designate 
 the city auditor or any other officer or employe of the 
 city to perform all the duties, and to have all the rights, 
 privileges and powers in this ordinance described, as ap- 
 pertaining to the city street railroad commissioner. 
 
 4. In case, however, the city, having legal authority 
 so to do, shall determine to purchase and take over the 
 property of the company or a part thereof, or in case the 
 city shall designate a licensee to purchase the same, as 
 provided in sections 32, 33 and 44, refusal by the com- 
 pany to comply with any material provision of said sec- 
 tions or any of them or of any other provision of this 
 ordinance designed to carry out such purchase, by the 
 city of by such purchaser, whether on the ground that the 
 same are not binding on it or for any other reason, shall 
 work a forfeiture of the grant made by this ordinance. 
 
 Sec. 48. This ordinance shall take effect and be in 
 force from and after its passage and legal publication, 
 and the filing of an acceptance in writing, as hereinbe- 
 fore provided. 
 Passed Dec. 18, 1909. 
 
 C. W. LAPP, 
 
 President of the Council. 
 PETER WITT, City Clerk. 
 Approved by the Mayor, December 18, 1909.
 
 375 
 No. 4. 
 
 TABLES SHOWING INFLUENCE OF GOLD PRODUCTION ON 
 
 PRICES. 
 
 Table No. 1. 
 
 Quantities, in avoirdupois pounds, of 22 staple agricul- 
 tural products of America, purchasable at Chicago prices 
 July 1, 1874, with one pound troy of pure gold, or with 
 16 pounds troy of pure silver. The prices given are in 
 greenbacks, with gold and silver coin at 
 
 Articles P] 
 
 Dairy butter f 0.24 
 
 Wool, fine unwashed ..." 0.30 
 
 Turkeys 0.12 
 
 Chickens 0.10 
 
 Cotton 0.17 
 
 Hams 0.11 
 
 Cheese 0.12 
 
 Eggs 0.12 
 
 Lard 11.10 
 
 Hides 0.07 
 
 Steers, medium 6.10 
 
 Mess pork 17.75 
 
 Hogs 6.00 
 
 Sheep 4.50 
 
 Flour : 6.00 
 
 Flax Seed 1.75 
 
 Beans 2.10 
 
 Red wheat, No. 2 1.16 
 
 Barley 0.86 
 
 Rye 0.83 
 
 Oats, No. 2 0.401/0 per bu 
 
 Corn, No. 2 0.59^4 per bu 
 
 161,642 
 
 Divide the aggregate of 161,642 pounds by 22, the num- 
 ber of articles, and w r e have 7,347 as the average number 
 of pounds of staple agricultural products purchasable 
 with one pound troy of gold or 16 pounds troy of silver. 
 
 ice. 
 
 Lbs. 
 
 per Ib 
 
 1,142 
 
 per Ib 
 
 913 
 
 per Ib 
 
 2,268 
 
 per Ib 
 
 2,741 
 
 per Ib 
 
 1,612 
 
 per Ib 
 
 2,492 
 
 perlb 
 
 2,284 
 
 per doz 
 
 3,426 
 
 per cwt 
 
 2,469 
 
 perlb 
 
 3,916 
 
 per cwt 
 
 4,494 
 
 per bbl 
 
 3,089 
 
 per cwt 
 
 4,568 
 
 per cwt 
 
 5,101 
 
 per bbl 
 
 8,990 
 
 per bu 
 
 8,775 
 
 per bu 
 
 7,833 
 
 perbu 
 
 14,175 
 
 perbu 
 
 15,300 
 
 perbu 
 
 1S.4U7 
 
 per bu 
 
 21,657 
 
 per bu 
 
 25,900
 
 376 
 
 That is, in 1874 the price or value of 1 pound of gold, or 
 16 pounds troy of pure silver was 7,347 pounds of the 
 staple products of the farm. 
 
 Table No. 2. 
 
 Quantities in advoirdupois pounds of 22 staple agricul- 
 tural products of America purchasable at Chicago prices 
 July 1, 1896, with one pound troy of pure gold. 
 
 Articles Price Lbs. 
 
 Dairy butter $ 0.12 per Ib 2,067 
 
 Wool, fine unwashed 0.12 per Ib 2,067 
 
 Turkeys 0.09 per Ib 2,756 
 
 Chickens 0.08 per Ib 3,10.1 
 
 Cotton 0.07 l/10per Ib 3,494 
 
 Hams 0.083/s per Ib 2,962 
 
 Cheese 0.07 per Ib 3,544 
 
 Eggs 0.10 per doz 3,721 
 
 Lard 3.62y 2 per cwt 6,842 
 
 Hides 0.0534 per Ib 4,314 
 
 Steers, medium 3.90 per cwt 6,360 
 
 Mess pork 6.82% per bbl 7,268 
 
 Hogs 3.20 " per cwt 7,752 
 
 Sheep 3.50 per cwt 7,087 
 
 Flour 3.65 per bbl 13,320 
 
 Flax seed 0.75y 2 per bu 19,713 
 
 Beans 0.85 per bu 18,605 
 
 Eed Wheat, No. 2 0.56 per bu 26,580 
 
 Barley 0.32 per bu 37,210 
 
 Eye 0.2914 perbu 47,109 
 
 Oats, No. 2 0.15% per bu 50,800 
 
 Corn, No. 2 0.27 per bu 55,122 
 
 331,794 
 
 Divide the aggregate of 331,794 pounds by 22, the num- 
 ber of articles, and we have 15,081 as the average number 
 of pounds of staple agricultural products purchasable 
 with one pound troy of gold July 1, 1896, showing an in- 
 crease in the purchasing power of gold over that of 
 July 1, 1874, of 105 per cent, and a decrease in prices 
 of a little more than one-half, or 50 per cent.
 
 377 
 
 Table No. 3. 
 
 Quantities in advoirdupois pounds of 22 staple agricul- 
 tural products of America purchasable at Chicago prices 
 July 1, 1909, with one pound troy of pure gold. 
 
 Articles. Price. Lbs. 
 
 Dairy butter $ 0.23i/ 2 per Ib 1,055 
 
 Wool, fine unwashed 0.24 per Ib 1,033 
 
 Turkeys 0.13 per Ib 1,908 
 
 Chickens 0.13i/ 2 per Ib 1,837 
 
 Cotton 0.131/2 perlb 2,067 
 
 Hams 0.16 per Ib 1,771 
 
 Cheese 0.13 perlb 1,908 
 
 Eggs 0.21 per doz 1,771 
 
 Lard 0.11 7/10 per Ib 2,120 
 
 Hides 0.101/2 perlb 2,364 
 
 Steers, medium 6.40 per cwt 3,875 
 
 Mess pork 20.00 per bbl 2,480 
 
 Hogs 7.68 per cwt 3,221 
 
 Sheep 4.70 per ewt 5,277 
 
 Flour 6.50 per bbl 7,57'. 
 
 Flax seed 1.66 per bu 8,964 
 
 Beans 2.50 per bu 5,952 
 
 Wheat, No. 2 red 1.14 per bu 12,054 
 
 Barley 0.62 per bu 19,200 
 
 Eye 0.81 per bu 18,:?7L' 
 
 Oats, No. 2 0.51' perbu 15,264 
 
 Corn, No. 2 0.73 per bu 1 
 
 139,000 
 
 Divide the aggregate of 139,000 by 22, the number of 
 articles, and we have 6,318 as the number of pounds of 
 staple agricultural products purchasable with one pi mini 
 troy of gold July 1, 1909, or a decrease from July 1, 1896, 
 of 8,763 pounds, or 58 per cent; which means that prices 
 are more than twice as high as they then wort'. ( 'ompared 
 with the prices which prevailed July 1, 1874, they arc 
 14 per cent higher.
 
 378 
 
 EXPLANATORY. 
 
 I started my tables with the prices of July 1, 1874, 
 because at that date one pound troy of gold and sixteen 
 pounds troy of silver were of equal value. For many 
 years before that date sixteen pounds of silver had been 
 more valuable than one pound of gold. Since then the 
 value of silver bullion has declined, but we are not 
 concerned about silver at present, although the question 
 suggests itself whether the free and unlimited coinage of 
 silver, would have produced any such elevation in prices 
 as the deluge of gold has done. 
 
 Did not compile the prices of January 1, 1910, be- 
 cause it would not be proper to compare July prices 
 with January prices. To what extent there has been a 
 recent increase in prices can best be determined July 1, 
 1910. 
 
 I have never claimed that this method of ascertaining 
 the fluctuations in the value or purchasing power of gold 
 is absolutely correct. It is only approximately so. 
 
 Every commodity has its own supply and demand, but 
 all commodities are affected by the value of the standard 
 with which they are measured. The steady increase in 
 the annual production of gold, must necessarily result 
 in higher prices, and still higher prices. Higher prices 
 induce great business activity and a larger consumption 
 of all staple products, and they inflate credits, but after 
 allowances are made for all these indirect influences of a 
 greater production of gold, the direct influence is very 
 large, and it can not be overcome. 
 
 Prof. Jevons, writing in 1863, reached the conclusion 
 that the gold from California and Australia, had in- 
 creased prices fifteen per cent, after making due allow-
 
 379 
 
 ance for the expansion of credits and other temporary 
 causes. His tract entitled "A serious fall in the value 
 of gold ascertained and its social effect set forth," gave 
 him great distinction as a political economist. In it he 
 said: 
 
 "While the elasticity of credit, then, may certainly 
 give prices a more free flight, the inflation of credit must 
 be checked by the well defined boundary of available capi- 
 tal, which consists in the last resort of the reserve of 
 notes, equivalent to gold, in the banking department of 
 the Bank of England. Prices temporarily may rise or 
 fall independently of the quantity of gold in the coun- 
 try; but ultimately they must be governed by this quan- 
 tity. Credit gives a certain latitude without rendering 
 prices ultimately independent of gold." 
 
 Senator Crawford, of South Dakota, in his able speech 
 on the subject in the Senate of the United States, February 
 15, 1910, quotes from Prof. Norton, of Yale, as follows: 
 
 "The popular outcry, now sweeping the country, di- 
 rected against prevailing high prices 1 , forcibly illustrates 
 some of the social consequences of the depreciation of 
 gold. * * * Gold ore yielding $20 gold per ton is 
 ^relatively rare in nature. On the other hand, gold ore 
 running from four and five dollars per ton is distributed 
 * very widely, and the deposits are of large area. When, 
 therefore, mining engineers and chemists succeeded in 
 devising methods of extracting gold from ore as low in 
 grade as $5 per ton at a profit the potential supply of 
 gold enormously increased. As a result of these scientitir 
 discoveries the annual production of gold began to mount 
 at an increasing rate in the nineties. Exactly as the suc- 
 cessive issues of greenbacks by our government during the 
 civil war forced prices to higher and higher levels until 
 finally commodities sold at two ami three fold previous
 
 380 
 
 prices, so gold, ever increasing in production, has pro- 
 duced a similar effect. 
 
 "Bradstreet's Index of average prices indicates an ad- 
 vance of 60 per cent in prices since July 1, 1896. In other 
 words, a dollar's worth of goods today could, have been 
 purchased for 62 cents in 1896. During the past thirteen 
 years prices have maintained an average advance of 4 1-2 
 per cent per annum. 
 
 "The individual, therefore, who deposited $1 in the sav- 
 ings bank in 1896 to be compounded at 4 per cent for the 
 thirteen years at the present time would have, principal 
 and accumulated interest, barely sufficient to purchase the 
 goods which he could have purchased with his original 
 dollar im 1896. 
 
 "Measured in purchasing power, the savings bank de- 
 positors of the United States in reality have received no 
 interest on their funds for thirteen years, since the in- 
 terest credited just about balances the depreciation of 
 their funds in purchasing power. 
 
 "The gold inflation is world-wide, and prices every- 
 where have moved upward in response. * * * 
 
 "At the present time popular clamor seeks to fix the re- 
 sponsibility upon the trusts, just as in Washington's day 
 a similar agitation resulted in laws against 'forestallers 
 and monopolists,' whereas the true cause lay in the de- 
 preciating continental currency. 'Not worth a continen- 
 tal' in the future may be substituted by the phrase 'not 
 worth a gold dollar,' for how serious the situation may 
 become nobody knows."
 
 DATE DUE 
 
 PRINTED INU.S.A.
 
 A 001041205