Electric Line Consolidation

ELECTRIC LINE CONSOLIDATION

The Scheme Appears to be Sure of Success

J. D. HAWKS TALKS

Ypsi-Ann and Boland Lines Will be in it--270 Miles of Electric Railway

The Argus of Saturday contained the information that the stoppage of work on the Boland line between Chelsea and Ann Arbor might be due to the fact that a scheme was on foot, in New York, to consolidate the several electric railway lines running west from Detroit and that both the Hawks-Angus and Boland lines might be included in this merger.

This proposed merger has now gone so far that the interested parties are willing to talk about it and Monday's Detroit Journal contained the following:

For over a year past it was understood that Hawks & Angus had practically sold the Detroit, Ypsilanti, Ann Arbor & Jackson road to the Detroit United Railway, and that the deal would be closed as soon as money became easier down east.

A few weeks ago Detroit United motormen and conductors who operate the Ypsi-Ann cars from the city hall to the junction, five miles out Michigan avenue, were caused to exchange places with the Hawks-Angus crews running from that point to Jackson, the object being to familiarize both crews with the entire line, as under Detroit United management the delay at the junction caused by changing crews would be obviated by having the men take their cars through to Jackson from the Detroit city hall.

After this plan had been followed a couple of weeks and the men were getting accustomed to it, Manager Brooks of the Detroit United ordered them to change back and is said to have remarked that the "deal was off." Following this announcement, certain negotiations which have been pending for a consolidation of all the electric roads between Detroit and Kalamazoo, inclusive, were again taken up and actively pushed.

S. F. Angus has just returned from New York, where he went on business connected with the merger. Mr. Angus could not be found at his office, but J. D. Hawks, for the first time on record, acknowledged that a consolidation was being engineered by Hawks, Angus, Boland and others controlling electric roads between the two cities mentioned.

"H. B. Hollins & Co., the New York bankers, have been appointed as a committee to continue work on plans for a consolidation of all electric roads from Detroit to Kalamazoo," said Mr. Hawks. "Mr. Angus went to New York for the purpose of meeting various parties interested, at which this action was taken. The deal was held back a long time by the tight money market, but money is easier now, and there is no question that it will be carried out. All that remains is a mere question of details. The consolidation will result in a more economical operation of the properties than is possible under several managements."

The properties to be consolidated include the Hawks-Angus main line from Detroit to Jackson, together with the Ann Arbor city system and the branch line from Ypsilanti to Saline, all known as the Detroit, Ypsilanti, Ann Arbor & Jackson, a total of something over 100 miles; the Boland properties, comprising the Jackson city lines, about 12 miles, the Jackson-Albion line, about 40 miles, and the finished part of the proposed Detroit, Ann Arbor & Jackson road, including about 20 miles from Jackson to Chelsea and about 12 miles toward Ann Arbor; the Railway Companies General properties, comprising the Albion, Marshall, Battle Creek and Kalamazoo lines, in all about 47 miles; and the Detroit, Plymouth & Northville line, 16 miles, owned by the Boland syndicate.

The Boland lines in and near Jackson get their power from a big water power station at Allegan owned by the Footes of Jackson. This station has 4,000 horsepower, and will undoubtedly be consolidated with the other properties, as many miles of road are dependent upon it for their supply of "juice."

From the above it will be seen that the long-pending deal for the purchase of the Hawks-Angus roads by the Detroit United is off, and that common interests are impelling Hawks, Angus and Boland to bury the hatchet. As Mr. Hawks is a man who never talks about a deal until it is as good as made, the chances are that a few weeks will put the Ypsi-Ann beyond the reach of the Detroit United, even if Mr. Hutchins should change his mind about accepting Hawks & Angus' terms, which are said to be very steep.

One of the details to be fixed up with Boland is said to be that gentleman's desire that the Hawks-Angus rails between Jackson and Chelsea shall be torn up and his tracks used instead. It is understood that Hawks & Angus are willing if arrangements can be made with the bondholders.

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The Detroit Free Press further says regarding the matter:

"I think the idea is practical if properly carried out," said President J. D. Hawks, yesterday, "and would be beneficial from the closer unification of interests and the economy resulting from the operation of the system under the one management."

There is no inclination on the part of the properties of the Detroit, Ypsilanti, Ann Arbor & Jackson to tear up any of its tracks and use those of the Boland line from Jackson to Chelsea. The location of the Ypsi-Ann road trough this territory is considered the best of the two and will probably remain intact. If the Boland line, which it is said, is now controlled by the General Electric people, comes into the deal, which is altogether probable, it is likely that the tracks laid east of Jackson will be torn up and used to build into Lansing with. This, however, is as yet mere conjecture."

Mr. Hawks said that negotiations had not proceeded far enough to discuss the financial arrangements involved and declined to say what they were likely to be, but it is believed that a new company will be formed, a large sum in cash paid to the Ypsi-Ann interests for a portion of their stock, and a new issue of bonds made sufficiently large to cover the remainder of the interests involved, and to care for the underlying liens now on the properties, a sufficient amount of the new securities being placed in escrow to retire the underlying liens.

There is now outstanding in the Detroit, Ypsilanti, Ann Arbor & Jackson $2,600,000 in stock, the majority of which is held by Messrs. Hawks and Angus; first mortgage 5 per cent gold bonds due February, 1926, $1,610,000; Detroit, Ypsilanti & Ann Arbor Railway Co. first mortgage 6 per cent due November, 1917, $600,000; Detroit, Ypsilanti & Ann Arbor railway first consolidated mortgage due 1924, $330,000, and Ypsilanti & Saline electric railway first mortgage 6 per cent bonds due July, 1919, $60,000 making a total bonded indebtedness of $2,600,000. The authorized amount of the consolidated mortgage of the Detroit, Ypsilanti & Ann Arbor Railway Co. is $1,000,000, of which $600,000 is reserved to retire the first mortgage of the company and $70,000 have not been issued. The Detroit, Ypsilanti, Ann Arbor & Jackson issued $1,670,000 first consolidated mortgage 5 per cent gold bonds due February 1, 1922. The authorized issue was $2,600,000 of which $900,000 are reserved to retire prior liens. The Union Trust Co., of Detroit, is trustee of all the mortgages, and the par value of the stock is $100 a share.