OCR Interpretation

The day book. (Chicago, Ill.) 1911-1917, April 13, 1916, LAST EDITION, Image 2

Image and text provided by University of Illinois at Urbana-Champaign Library, Urbana, IL

Persistent link: http://chroniclingamerica.loc.gov/lccn/sn83045487/1916-04-13/ed-1/seq-2/

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tliat the city of Chicago can own and
run an automatic phone system and
eventually estabpsb. a penny-a-call
Att'y Munro will deny that the
Tight to sell should be granted. Under
his privilege ef calling in anybody and
everybody who has had anything to
do with the automatic deal, Munro
may call Charles G. Dawes, president
of "the Central Trust Co., and" David
R. Forgan, president of'the Natiqqal
City bank. They were receivers for
the Illinois Tunnel Co. and sold $4,
600,000 worth of receivers' certifi
cates and notes before they passed
the property along tQ the Qbicagq
TUSS1 C- feyysr at rewjiyergtiip
It is intimated that various ways
by which financiers can milk the pub
lic and bambqozle buyers of bonds
and stocks may be brought out in de
tail This angle of the automatic
phone company deal has been partly
ventilated before city council com
mittee and on council floor. But
some of the panels and windows have
never been opened thus far.
Fayette Munro, in charge of the
quiz for the public ownership crowd,
Is the same lawyer who was retained
by the Citizens' league to push the
suits brought by John B. Fergus. The
suits ended with payrolls tied up in
City Hall of Chicago and state cap
ital at Springfield, drove the legisla
ture to a special sessipn and resulted
to accounting reorganizations.
Chicago Tunnel Co. application for
leave to sell the automatic phone sys
tem to the Chi. TeL Co., says:
"Petitioner shows that it has is
sued and outstanding 1,000 shares pf
stock, of the par value of $100 each,
ad its demand notes of the par values
of $23,913,081.30, secured by a first
mortgage to the Central Trust Co. of
Illinois, trustee. It owns a system of
tunnels under the principal streets in
the business portiqn of the city of
Chicago, aggregating 60 miles in
length, wherein it operates diminu-
T tive freight care dra,wn by electrip
mqpqrs jor tne transportation oi mer
chandise and other commodities. I
also owns and operates in Chicago
what is commonly known as an au
tomatic telephone plant and system
By reason of the foregoing facts, pe
titiener states that it owns and oper
ates two distinct public uijities In the
city of Chicago."
Up tq Jan. 1, 1908, 111. Tunnel Co.
spent more Uiaji 2,"000,000on giant
ijnd system, it "proved unprofitable"
because "income was not sufficient to
pay operating cost." Passing into the
hands of bankers appointed as re
ceivers by U. S. circuit court, "said
receivers, pursuant to and n accord
ance with the orders of said court, is
syeif sjiid. sojd, receivers' certifictp
and notes of the par value of $4,600,
000, and with the proceeds thereof
proceeded to and did install telephone
plant and equipment adequate to
serve 20,000 subscribers."
At receivers' sale March 26, 1912,
Chi. Tunnel Co. became owner and
issued in payment therefor its capital
stock of par value of $100,000 and it!s
demand notes of $23,913,081, secured
by first mprtgage to Central Trust
Co., trustee.
These Chicago business me.n in
charge of this enterprise then went
on pouring more and more millions
into a financial rat hole until they
have to 4ate sunk $8,483,978, without
earning profits, according to their pe
tition In 1913, "under the conditions
which then existed, in the judgment
of your petitioner and of the Ameri
can Telephone & Telegraph Co. the
automatic telephone properties con
stituted a value of $,30Q,QO0, which
was price fixed; subsequently by mu
tual agreement said "price was re
duced to $5,536,192."
Kempster Miller's report finding
the whole property worth $1,582,058
is cited and the city ordipance parsed
by the city council consenting to sale
at that price, with $500,000 cash paid
to the city.
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