ness and hold onto the tunnel busi
ness, which is said to be very profit
able. At a recent meeting of the gas, oil
and electric light committee of coun
cil, Attorney L. G. Richardson, rep
resenting the Bell interests, said that
under no circumstances did his com
pany wish to buy the telephone rights
of the tunnel company, but it might
buy that company's telephone prop
erty. In the original ordinance of the I.
T. & T. Co. there is a provision which
makes it necessary for the tunnel
company to get the city's permission
to sell out the telephone end of its
business. Here is that provision:
"It shall be expressly the condition
of this grant that if the Illinois Tele
phone and Telegraph Company, or
any of its successors or assigns, shall
either sell out to or enter into any
agreement with any existing tele
phone company, or any of its suc
cessors or assigns, doing business in
the City of Chicago, which agree
ment should tend to make competi
tion inoperative, this ordinance shall
become null and void, and the plant
of said company, together with the
conduits, wires and poles then in the
streets belonging to said company
shall be forfeitedto the city." '
Unless, then, the companies get the
city's consent to the sale, which con
sent would be equivalent to a waiver
of the city's rights under the for
feiture clause, the entire plant of the
Illinois Telephone & Telegraph Co.
would be forfeit to the city if the sale
were made and the forfeiture clause
violated.
If, however, the city does consent
and waives its rights, then the Bell
concern can buy from the tunnel
company its telephone PROPERTY
only, including its option on the Au
tomatic Electric Co., which owns all
the patents as well as the "factory of
the automatic telephone, and the
promoters who got the original fran
chise by a trick, would have their
money for the automatic telephone,
plant, and still have their tunnel sys
tem. There is another reason why the
Bell concern wants only the property
and doesn't want the telephone
RIGHTS of the tunnel company.
Sec. 7 of the franchise ordinance pro
vides that beginning ten years after
the passage of the franchise ordi
nance, which would be 1909, the com
pany had to pay the city a percentage
of its gross receipts from the opera
tion of its plant.
This would be 3 per cent from 1909
to 1919, 5 per cent from 1919 to 1924;
and 7 per cent from 1924 to 1929,
when the franchise expires.
By buying only the TELEPHONE
PROPERTY of the tunnel company,
the Bell concern, or Chicago Tele
phone Co., would get out of paying
any percentage at all on the gross re
ceipts of the automatic telephone
business. And the tunnel company
would get out, too, because
wouldn't be getting any telephone
receipts.
If the city would investigate, it
might find out that already that for
feiture clause has been violated; for
it provides not only for forfeiture if
the tunnel company sells out, but if
it shall ' "enter into any agreement
with any existing telephone company,
or any of its successors or assigns,
doing business in the city of Chicago,
which agreement would tend to make
competition inoperative."
There is evidently some agreement
between the two companies now
which tends to make competition in
operative, for the Illinois Telephone
& Telegraph Company laid off all its
solicitors on Wednesday of this week
and is not trying to get any more sub
scribers. The fact that the attorneys for
both companies have alrea'dy appear
ed before the council committee,
both advocating the granting of per
mission to sell, is evidence that the
two companies have already arrived
at some agreement which tends to
eliminate competition,