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PICTORIAL
SECTION
RAGES 20, 21, 22
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Aliening
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fV0L. IV. NO. 7
LEADERS OF PHILADELPHIA BAR
& .
TRANSIT LEASE GUARANTEES DIVIDENDS,
CONTINUES EXCHANGES AND PROVIDES
FOR PURCHASE OF P. R. T. STOCK
PA. Memtt rayior, at
Councils' Hearing!, Ex
plodes Legal Bomb
Under Advocates of
Smith - Mitten Pro
posal mefects in the Instru
ment, Already omteci
Out, Verified by ' the
Joint Opinion of City's
Most Eminent Counsel
..iie' Joint Finance and Street
'Railways Committees met this after
noon m uity vo "Urtl "jc-""""
bthe Smith-Mitten proposed transit
,... Tho prcat outstanding fcatura
of the meeting was furnished by A.
Merritt Taylor, cx-uirector oi vne
ZTransit Department and opponent of
the Smith lease. Mr. Taylor made pub-
lie a written opinion furnished him by
fiix of the city's most eminent lawyers
in which they jointly and severally
ibrand tho Smith-Mitten proposal as
nnfnir ami unjust to tho city, fully sus-
taining all the contentions made against
it by Mr. Taylor. The lawyers wno
pgavo this opinion are:
CHARLES L. McKEEHAN.
PARKEK S. WILLIAMS.
THOMAS RAEBURN WHITE.
WILLIAM A. GLASGOW, JH.
HENRY C. THOMPSON, JK.
ttWEN J. ROBERTS.
The opinion, together with an intro-
fductory statement by Mr Taylor, is
Iprintcd in full in a parallel column.
DIVIDEND IS GUARANTEED
These lawyers settle tho moot point
fa to whether tho terms of the Smith
lease insure that a cumulative dividend
W 6 per cent shall be paid to the Transit
tCompany frohv the -revenues of tho
Icomblned city-owned P. R. T.-owned
Psystcms. They find that this cumula-
fctive dividend is insured under the Smith
Etease from the date of the signing of
the instrument.
Jr Thev find thnt it continues cicht-
Icent exchanges and provides for the
jpurchaso by the city of nil tho P. K. T.
loroDertv. including leaseholds and fran-
tchises, at a price equal to tho par value
f Qf, its stock outstanding at the date of
i purchase, plus accumulated dividends.
Thfi nninmn VinM tVinf. thn Smith
t lease requires thatr tho city's full rev
s' enue interest and sinking fund charges
Cihall be made out of gross revenues;
s in other words, out of car fares. This
; would mean higher car-fare rates than
I the existing five-cent charge.
CONDEMN PUZZLING CON
STRUCTION They find that the Smith lease is in
volved and understandable only after
i expert study. They declare that any
arrangement between the city and the
P. R. T. Company should and can be
embodied in an instrument the full
meaning of wnich can be gathered by
fan ordinarily intelligent citizen.
, TAYI.OK APPEALS TO CITY
Following this surprise bomb, the ex-
Iploslon of which qulto nwept the pro-
IVonents of the Smith Icaso off their feet.
Jr. Sfajlor presented to William Draper
Uwa," -special transit advisor to Mayor
Smith, a penes of tuestlom containing his
Injections to iho Smith lease Mr. Taylor
Uccompanled thl btatcment with a state
Jment to the public at largo, which reads:
"City Councils hao under consideration
Uw BbHdlled binith lease, which by ob
eijr proiioiiR contalne'd therein dlsie-
iroa tiie cardinal principles upon which
lhecltliens of I'hllndelnhln h.ivn haseil tlir.ii
prosrani for tianslt development. Mayor
"'mn puoiicly stands sponsor for this lease.
The Smith lease would:
'8) Continue tlm llloirnllv ll.prlmlnr.
lory threo-cent fTrhatiir tickets, nnrt
tjnake necessary Inordinately high car-
, MCB. ,
(bl lleiarii nnil.,,.,,M ,,.. U
'y adopted comprehensive plan of
wnit development.
i 'cj Forco street railway passengers to
Py the Phllariptnhln TJnnlrt Transit -.
:JJny stockholders a guaranteed C per
...... ..uiiiuiauve aivmena. vast additional
Pfonts, and ultimately $50 per share for
Vwir tock.
.id' Forco street railway passengers to
.. I,Q t,ie clty tne entire cost of con
Ji ? 5 IU high-speed system. In addl
on to Interest thereon pending such pay
ee) Plai-o ll, j..ii. - Tv.i,.j.ru,-,
- '. " ' ucouii UL J llliauciyuia a
rnlt development In tho hands of a
Want Of three mpmhara, with niitnnmlln
r' n??!?.0 bo nominated, by the Mayor and
-,, umaeipnia iiapld Transit Company.
" city, and tho street tatlway passengers.
rnttnued n Ta 8U. Column One
The Continuation of thp Story
"Germany, the Next
Republic?"
by
Carl W, Ackerinan
s printed on Page 0 ,
BLOW THAT IULLS THE LEASE
STATEMENT BY A. MERRITT TAYLOR
Erroneous and misleading interpretations of various Important provisions
in tho Smith lease have jeopardized the interests of tho city and its citizens;
therefore, it becamo my duty to have tho terms of the Smith lease clearly
interpreted by competent authorities for tho people of Philadelphia, who have
relied upon mo to fight for their transit program to a successful conclusion.
Consequently I called upon a number of public-spirited members of the
Philadelphia bar of the highest standing for their opinion with relation to
all important points at issue.
They have spent a vast amount of time in studying tho Smith lease and
in determining the vital public questions which arc involved without making
any charge for this important service.
I am happy to say that they have fully and unqualifiedly sustained my
views with relation to the questions involved.
Their opinion is submitted herewith.
September 21, 1917.
THE OPINION
PHILADELPHIA, Pa., Sept. 20, 1917.
Mr. A. Merritt Taylor,
Philadelphia, '
Pennsylvania.
Dear Sir You have submitted to us a copy of the proposed, so-called,
"Smith Lease," between the city of Philadelphia and the Philadelphia Rapid
Transit Company, and have asked our opinion as tothe meaning of the lease
on certain points. We beg to advise you as follows:
1. QUESTION. Docs tho lease insure that a cumulative dividend of 6 per
cent shall be paid to the Transit Company from the revenue of the combined
system?
ANSWER. The terms of the lease arc such that the company is insured
a dividend of G per cent, cumulative from the date of the lease.
An operating surplus is provided, which in the earlier years of the lease
will amoCint to a large sum, which sum is pledged for the payment of full 6 per
cent cumulative dividends from the date the lease goes into effect. In the order
of payments out of gross revenue permitted under the lease, it is specifically
provided that payments necessary to maintain the operating surplus fund shall
not be made until after 6 per cent dividends have been paid in full from the
dalo the lease becomes effective.
It is obvious, to go no further, that an operating surplus fund is a necessity
in order to enable the system to be operated, and, as the existing surplus of
tho company, which on June 30, 1917, amounted to $4,345,900.21, will be dis
tributed to the stockholders, there will be no operating surplus fund except
such as may be created and kept intact by payments out of gross Tevenue,
which must follow, not precede, a payment of 6 per cent cumulative dividends.
Moreover, in case the revenue applicable to dividends is insufficient to pay
4 per cent for any six months, the city pledges itself to make "an earnest ap
peal to the Public Service Commission for an increase in fares, "which may be
by flat increase or charge for transfers or both," to produce "at least sufficient
revenue" to pay 0 per cent dividends cumulative from the date of tho taking
effect of tho lease. Finally, certain payments into the sinking fund, necessary
to enable the property of the Transit Company to be purchased by the city nt
the maturity of tho lease, cannot be made until after such dividends have been
paid in full, and the city would not be entitled to any profits whatever from
the operation of these lines until after said dividends have been paid.
2. QUESTION. Does the lease provide for the purchase by the city of the
property and franchises of tho Philadelphia Rapid Transit Company at a price
equal to the par value of its stock then outstanding?
ANSWER. The lease provides for the purchase by the city from the
Philadelphia Rapid Transit Companj of all its property, leaseholds and fran
chises, at a price equal to the par value of its stock outstanding at the date
of the purchase, plus accumulated dividends, as in the lease provided. The
lease does not in terms require the city to make a purchase, but it provides for
the making of large payments, including the city's entire share of profits of
the unified system, into a sinking fund, which will certainly amount, before the
date when the purchase could become effective, to a large sum of money. The
funds so paid into the sinking fund, it is expressly provided in the lease, "snJ"
be used and held for the purchase of the property, lease holds and franchises
of the company," either under the existing contract of 1907 or under the pro
visions of the lease. v
Inasmuch as this great sum will be absolutely tied up for this purpose
indefinitely and permanently, it is apparent that the city could never use
this money except for the purchase of the property of the Philadelphia Rapid
Transit Company at the price specified. At the termination of the lease the
city's property reverts to it, but it would not receive from the company equip
ment and appurtenances owned by the company and used in the operation
of the city system which would be necessary for such operation. There is no
provision in the lease by which the citycan acquire this property without
buying all the Transit Company's property, to the end that it may receive
back again and operate its dwn lines separately from the lines of the Transit
Company; nor is there any provision in the lease by which the funds accumu
lated, as aforesaid, in the sinking fund could be used for such purchase. It
is, therefore, our opinion that under terms of this lease the city will be com
pelled to purchase the property of the Transit Company at the price stated
at the time or times specified in the lease or under the contract of 1907.
3. QUESTION. Does the lease require that the city's full interest and
sinking fund charges and the payments referred to in Questions 1 and 2 shall
all be made out of gross revenue, or, in other words, out of car fares?
ANSWER. Yes.
4. QUESTION. Docs the lease provide for the continuance of the present
three-cent exchange ticket charge?
ANSWER. We have no hesitation in advising you that the lease does
provide for the continuance of the present three-cent exchange ticket
charge. These exchange tickets, it is expressly provided in the lease, shall
continuo in accordance with the present arrangement until after the subway
delivery loop and tho first individual operating section of the Broad street
subway shall be placed in operation and until such exchanges shall thereafter
have been abolished or modified by the Public Service Commission.
In conclusion, we desire to say that any arrangement Uiat may be made
between the city of Philadelphia and the Philadelphia Rapid Transit Com
pany covering this important matter should and 'can be embodied in an instru
ment the full meaning of which can easily be gathered by an ordinarily
intelligent citizen. As the lease now stands, we find that a number of its
most important consequences result from the concurrent operation of widely
separated paragraphs, whose relation to one another can be perceived only
after expert study. This comment is especially applicable to provisions respect
ing rates of fare, respecting tho distribution of the gross revenue of the
unified system and respecting the powers of the board of supervising engineers
created under Article XXJCIV of the lease. Tho cumulative effect of various
paragraphs is to confer upon this board wide supervisory powers which exist
ing statutes would seem to vest jn City Councils or in the Department of
City Transit or in the Public Service Commission. We consider the provision
for such a board as of doubtful .legality and as likely to lead to disputes and
mtirntinn the result of which it Is impossible to foretell at this time,
migauon, (Signed) CHARLES L. McKEEHAN
PARKER S, WILLIAMS
SAY
T. R. WHITE
WILLIAM A. GLASGOW, JR.
HENRY C. THOMPSON, JR,
OWXN J. XtiMgftTS
PHILADELPHIA, FRIDAY, SEPTEMBER 21,
BRITISH SMASH
THROUGH LINES
'Complete Success' Won
Over Enemy, Field
Marshal Announces
FEARFUL LOSSES
INFLICTED ON FOE
Offensive East of Ypres
Wins Ten Square Miles
of Ground
COUNTER-ATTACKS F A I L
LONDON. Sept It
"Complete succeV uai Kleld Marshal
Italg's epitome today of the results In date
of the great British drte acrci the Vpiei
Menln road.
Ills official report declared the enemj's
losses were very heavy. British casualties,
he said, -were light.
"Detailed reports confirm the complete
ness of our success," the British commander-in-chief
asserted. "In the neighborhood of
the tower and hamlets northeast of I.angc
marck during tho ecnlni? our local at
tacks cleaned up a number of strong points
and completed the capture of objectives
there.
"During the afternoon nnd evening con
siderable forces of the enemy counter-at-tacKcd,
sunYrlnE unusually great casualties
"The obstinacy of the enemy Increased
his lossei without regaining any valuable
ground Our own losses were llgh "
"Clear light during tho latter part or the
daa," Halg's report continued, "enabled us
to obtain warning of Impending attacks, Ad
vanclng Hermans uere dcstroed In con
centrated rifle, mathlnc-gun and nrtlllciy
fire
U night the enetm exhausted In hlx
previous efforts, did not counter-attack and
(olillnuril on I'BBe Four. Column lour
PLANS TO SWAY
CONGRESS LAID
BYBERNST0RFF
Former Ambassador's
Message Revealing
Plot Made Public
ASKED FOR $50,000
"INFLUENCE" FUND
Germany's Diplomatic ,
Intrigue and Blunders
GERMANY, through the then
Foreign Secretary Zimmcrmann,
plotted to align Mexico and Japan
in war against the United States.
She sought to influence the Con
gress of the United States against
war by expending a sum up to
,S!u. "" the Swedish Minister at
Buenos Aires as a means of com
municating Count Luxburg's in
dolent advice that all vessels be
"spurlos versenkt."
She used the Swedish diplomat,
Cronholm, at Mexico City, as her
active messenger and, according to
a letter in American possession, also
as a direct spy.
She plotted, through her ally,
Austria, for destruction of munition
plants in the United States,
She tried to stir up a revolution
in the Philippines by promising the
Filipinos white women ir. return for
an uprising.
WASHINGTON Sept II Former Ger
man Ambassador Count von Bemstorff vsas
an active antl-Amerlcan plotter while his
nation and tho I'nlted States -were still
friendly, and he asked the 'Berlin Foreign
Office on January 22 for $50,000 to In
fluence Congress, "a on former occasions "
Ills activity was In the nature of Influencing
Congress through an unnamed organiza
tion, which, he Informed his Government,
could "perhaps prevent war."
The State Department made this fact pub
lic today In announcing tho text of a mes
sage he forwarded on that date.
THE OFFICIAL STATEMENT
The State Department's announcement
said:
The Secretary of State Isiues the fol
lowing from Ambassador Bemstorff tc; the
Berlin Foreign Office, dated January 22,
1917:
I request authority to pay out up to
150,000 In order, as on former oecatloni,
to Influence Congress through the orjnl
tatlon you know of, which can, perhapi,
prevent war.
"I am berfnnlnc In the meantime to
act arcordlnrly.
"In the aboTO elreumttances a publlo
official (ierman declaration la favor of
Ireland It highly detlrable. In order to
gala the support of Iltli Influence here."
The State Department Indicated that It
Is convinced of the Identity of the organ
liatlon Bemstorff referred to, though there
Is sufficient doubt to prevent announcement.
The Department tended to dissipate the
Idea of any actual expenditure of the money
on Congressmen direct. It was Intimated,
that propaganda telegrams sent to Congress
had their origin In German money
Bemstorff may have sent his message
with the aid of some neutral diplomat
Though It apparently reached Berlin It was
probably Intercepted and decoded.
The State Department said that even be-
CaaHasWt Tt Vtmr, Ceta
1917
CormoRT, 1917.
MAYOR SMITH, ACCUSED IN MURDER PLOT,
IS RELEASED UNDER $10,000 BAIL BY COURT;
1 GUNMEN IDENTIFIED BY NEW YORK POLICE
WARRANT FOR
Commonwealth of Pennsylvania : ss.
County of Philadelphia :
ISADORE STERN, being duly sworn according to law, deposes and says
that Thomas D. Smith, Isanc Dcutsch, David Bennett, late of said county,
and others to this nfliant unknown, within two years last, past and within the
jurisdiction of this county, did unlawfully, maliciously and wickedly combine,
confederate and agree together to violate the Act of Assembly of this Com
monwealth of Fcbrunry 15th, 190G, by causing, nnd procuring through them
selves and others, officers and employes of the City of Philadelphia to take an
active part in political management and political campaigns and use their
office to influence political movements nnd the political action of other officers
and other employes nnd to Interfere with the conduct of an election to be
held at said City of Philadelphia on the 19th day of September, 1917, and the
preparation therefor, and in pursuance of snid conspiracy to commit assault
and battery, aggravated assault and battery and murder, which said con
spiracy was performed and executed within the said City of Philadelphia and
elsewhere within two years Inst past, contiary to the form of the Act of
Assembly in such case made nnd provided and against the peace and dignity
of the Commonwealth of Pennsylvania. (Signed) ISADORE STERN.
Sworn to and subscribed before me this 20th day of September, A. D.
1917. (Signed) THOMAS J. SHERMAN,
(Seal) Pro. Clerk of the Municipal Court.
.. . ............ .,jfcj- :..JM,,UWm'tUUiivu .
BASEBALL SCORES
CLEVELAND .0000000
ATHLETICS ...0 0 0 10 2 0
Sloiton nnd BUlingb; Sclmuei and McAvoy. O'Loughllu aurt aioilauty
PHILLIES 2 0 0
CHICAGO .....0 0 2
Alexander nml Klllefcr; Douglau and Dilhocfer. O'Day and Hatribou.
NATIONAL LEAGUE
NEW YORK 10 10 0
PITTSBURGH OO0O0
Denton nnd McCaity; Steele and Schmidt.
BOSTON
ST. LOUIS ;
TOSTPONED KAIN
I
; ' AMERICAN LEAGUE
r h t r a nn Innninn
kosToTjrrr.avVo
Taber and Schrtlk; Leonnid and Tlioiuns.
DETROIT 4 0 0 0
WASHINGTON 0 0 0 0 '
Boliuid and Stanage; Haiper niul Aiusmitk. '
ST. LOUIS 0000001 .
NEW YORK 0000203
Bothorou nnd Sovercid; Mogrdge nnd lloul.
FOOTBALL
PENN CHARTER ., ,
CHELTENHAM HIGH SCHOOL
RIGID CENSORSHIP IN TRADING WITH ENEMY ACT
WASHINGTON, Sept. 21. Cairylng a diastlc lettei, cable and
wiiek'bs. ceiiboiship amendment, th trading with the enemy act will
bo adopted in the House today oi tomonow nnd the Senate next week,
Chaiiuian rietcher, of the Seunte Commeice Committee, continued le
poits that information of Aimicau troops tian&ports, meichautmen
nnd lullitnvy sfciets weie conveyed to Geuuniiy by uuceusoied mea
tuses to ucutial countiieb.
I. W. W. DRIVEN OUT OF DAKOTA TOWN
FARGO, N. D., Sept. 21. Toity-six I. W. W. weie diivcn out,
of Sabln, N. D., today by police and county officials, nsslsttd by the
Mooiehead home guard. The men weie escorted southwaid along the
rallioad txack after each had been, seaiched and an I.- W. W. caid
found in his possession. -One man canied n tevolver. v
POU FAVORS SPECIAL SUFFRAGE COMMITTEE
WASHINGTON, Sept. 21, Representative I'ou, Noith Caio
linn, chairman of the House Rules Committee, nnnouueed this aftei
noon he fnvoied a special suffinge committee and will bring in a rule
establishing one ou Monday. Suffragists have fought for this lecog--nitiou
iu scveial faessions and legar-d Pou's chniige of attitude a
victoiy.
lUi BILLION WAR BILL FINALLY PASSED
WASHINGTON, Sept. 21. With scarcely any discussion, the House this
afternoon adopted the conference report on the $11,538,000,000 bond and cer
tificate bill. The bill as adopted changea the amount to be spent in marketing
the bonds to 1-5 or 1 per cent on their value. The amount to be spent in
marketing the certificates is 1-10 of 1 per cent. The Senate already had
adopted the conference report In its present form. The bill now goes to the
President.
KAISER HAS GONE TO SOFIA
ZURICH, Sept. St.TJie Kaiser ha sone to Sofia, capiUl of Bulgaria, Mid
a telefcram from Vienna today. It did not expUiri the Kaiser" mission.
IT Tan Fcilio Livait Courixt
MAYOR SMITH
' o'tisrts
SCORES
O 7'
0 0
PRICE TWO CENT
Isaac Deutsch, Fifth
Ward Vare Leader
and Lieutenant Ben
nett Also Held
All Are Permitted to
Sign Their Own Bonds
and Are Given Liberty-One
Prisoner Offers to
Confess, but Becomes
Clamlike When Re
fused Immunity
Thomat B. Smith, Mayor of Phila
delphia, was held in $10,000 bail today,
accused of conspiracy to commit
murder. '
At the same time Common Council
man Isaac Deutsch, Vare-Smith leader
in the Fifth Ward, and Lieutenant
David Bennett, Vare-Smith police com
mander at the Third and De Lawey
streets station, were held under like
bail on similar charges, all gnvingc
out of the political murder of Acting
Detective George A. Eppley by im
ported Now York gunmen in Wednes
day's riotous primary election in the
"Bloody Fifth."
Mayor Smith was permitted to sign
his own bail bond. So were his alleged
accomplices.
The formality which took place in the
Municipal Court marked the 'first time
in the history of Philadelphia that its
Chief Executive has been arrested on a
criminal charge.- It will be followed by
formal arraignment of the Mayor and
his political followers next Tuesday be
fore President Judge .Brown, of the"
Municipal Court, who notified the
Mayor by letter that he was wanted
today.
District Attorney Samuel'' P. Rotan,
announcing "progress" In his probe
Jter.the. '.'man ,high, upJthlsltser.-,
noon aeciarea- mat- ne 'nad 'positive
evidence that the work of the gun
men was due to a definite
arrange-
ment."
The Coroner's investigation into the
political murder got under way today.
GUNMEN IDENTIFIED
The two alleged murderers of Eppley,
now under arrest have been identified
through Bertillon measurements in New
York, according to word sent to Captain
of Detectives Tate by Inspector Faurot,
of the New York Detective Bureau, oyer
the long-distance telephone today. Jack
Mascia,, who fired the shot, is Samuel
Scucliga, and John Costello is Henry
de Inrao, both well-known New York
gunmen, according to Inspector Faurot.
thug orpuns to coxfess
The Identification Is believed to be a link
In the chain leading to tho "man higher
up" The two prisoners, under Instructions
fiom their counsel, have consistently refused
to tell who they are
De Inrao, alias foitello, offered to con
fess to Captain Tatu this morning, but when
not ussuied Immunity he became clam
llke. isaao Deutsch was the first of the thre
alleged conspirators to appear in room 650,
City Hall, to sign his ball bond. He ap
peared at 11.04 o'clock and asked Thomas
J. Sherman, the clerk, for the bond, which
he sinned.
"Are there any costs?" he asked,
'One dollar and a quarter," replied Sher
man, Deutsch cave him a ! bill.
That will be all right," he smiled, start
ing to walk away.
"No," said Hnerman 'The costs ar
$1.15
He handed Deutsch the bill and Deutsch
then gave him Jl.'.'6 In change,
MAYOR SMITH API'UARS
At 11 05 the Mayor appeared ,wlth his
bodj guard. George Bern, and former Cap
tain of Detectives, Souder. He shook hands
with Deutsch
"Wilt ou let me see the nnidavlt?" h
asked Sherman.
Sherman handed him a copy of It
"Why," exclaimed the Mayor, reading the
charges, "this Is signed by Isadore Stern.
The letter that I received from Judge
Brown said that the affidavit was sworn
to by James A. Carey. Is this the affidavit
and warrant that I "
CAItEY TOO ILL TO SIGN
"Yes, that Is the affidavit" said Sherman.
explaining that Carey was toq III to sign It
and that Stern had signed It
"It's all right," said the Mayor "I Just
noticed the discrepancy Where do I sign
the bond?"
The Mayor then affixed his signature
and left the room, going through the lane
opened for htm D" detectives, who pushed
aside the jam of politicians lawyers, city
officials and others of the curious that hat
crowded the chamber.
No charge vVas made against the Mayor
Continued en Tate lUiht, Celumn fire
THE WEATHER
FOllVCABT
For Philadelphia and vicinity Vqrthl
cloudy and tomexchat cooler tonight t
Saturday; gentle icetterlu xcindi.
M5XGTH r 1HY r,
Sun rlii 5.. id Sun stu IWt m.
1JKUVWAHE RIVKR TIDK CHAMIES
CHESTNUT BTR,GRT
HUB ur ifit fll'l yin wur. 4;S p a
u wtr iijo,ni. I tw wtr I ;i. m
TSMi'MMTVIW AT MH.,
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