Los Angeles daily herald., 1890-03-07
THE BANK BOND.
It Causes a Squabble in the
Council.
MR.. CHILDREss'S EXPLANATION,
The Alleged Reason President
Frankenfield Opposed the Ap-
prOval of the Securities.

The City Council met yesterday morn
ing, President Franken6eld in the chair,
and Messrs. Shafer, Brown, Van Dusen,
Hamilton, McLain, Summerland, Bon
sail and Wirsching present.
The City Clerk read petition from
E. L. Stern. asking for franchise for a
water company. He stated that he had
sufficient water, pure as crystal, to sup.
ply population of SOC, 900 and if granted
he would be able to supply every portion
of the city with sufficient water, for all
purposes. He would enter the city with
sufficient fall to carry water to the high
est hill in a quantity sufficient to afford
protection from fire. The petition, to-
gether with a draft of the ordinance
granting the franchise, was referred to
the committee on fire and water, to
which committee Mr.. Shafer was added.
The Fire Commission. recommended
that the city lease fire engine house on
Third street, between Main and Spring,
at $3.50 per month. Referred to the
building committee.
Mr.. Childress, of the Ci y Bank, pre-
sented the following communication,
which he read:
In presenting the present com naunication to
you the City Bank desires to preface 1t by ex-
pressing its grateful sense Of the fairness with
which thss been treated by the greater num-
ber of your honorable boay In each step OF the
proceedings looking to the consumm alton OF
Its effort to pay the people OF OUT city interest
for the use of their public moneys, and the eve,
dent desire of most OF you to honestly ana
st in jfco Orfa tn a
to that end, which shall be equally Just to beth
parties, the city ana itself. If the position
wnich II now tnds itssii Gompet1e91 70 tsxe
its sorrow at what it deems truth and Justice
equally to itself and you, should lead tn such
a result. That its present position may beibet-
ter understood, it begs leave to advert to the
action of your honorable body on February
26th, when this natter was last before you. On
Messrs Hamilton, Van Dusen and McLain, to
whom our bond had been referred as the
proper parties to pronounce on its suffciency,
after Investigation of the solvenoy OF
each individual surety thereon, returned the
same to you with the report, saying: eve
deem the bond sufficient" After announcing
port your honorable president Mr.. Franken
field, demanded and obtained the data from
which the committee had made It's report and
bitter speech. opposed the adoption of the
same. The report finding the bond sufficient
adopea by vote 10
would have concluded the matter and the
acceptance of the bond would have followed
however declared that he would oppose its
acceptance, and then seemingly with the hope
of harmonizng this resistance, the matter was
poktponed by your honorable body for some
days by resolution which provided: " That
the bond be returned 70 the City Bank with the
permission o insert additional sureties" We
must call your attention to the fact that no
additional sureties were asked for or required
of us. nsr was any additional amount
named named for bono the ~heh
required BY you. Left in this position the
City Bank could do nothing. for nothing was
TeauiTeu o, Tea ~. n9r of so We are s9 scompeee
to present the matter befere you in exactly the
same position in which 1t was left In doinl
this, however, we have further oEmunica
ton to make which our sense of the fairness OF
your intentions, above expresse1, leads US to
believe due you IN order that you nd mag see TINS
selves correctly Judge ofthe origin Of obstruc.
tions which are being opposed to the action OF
your honorable body In this matter. In doing
this we shall lay before you matters that have
heretofore been of a private nature, and
would continue to be so but for their connec-
ton with certain influences which appear now
to have entered your body. opposing to the
utter ost extent, and for purely self n ends,
the consummation of that which the majority
of your members, equally with ourselves, are,
we are sure, honestly endeavorlng to bring
about.
shortly, after it was ascerssined tina,
been accepted, Mr.. Geo. H. Bonebrake, of the
Los Angeles National BeDk, sought -en inter
view with U.S. and after eaPlsinsg that FIVE S
California Bank on Fort street: were mbined
to handle the public moneys of the city, stated
that he, representing those banks. desired to
bank: "If the City Bank would divide the
money with them pro rGtG, they would furnish
any bond required by the Council, and would
pay,to the City Bank the same interes on their
several shares of money that We paid the city,
our bank being the receiving and d.stri outi ng
bank and etaining its pre- rata share of the
money. II we did not accede to this, they
would oppose in every, way, the City Bank OBJ
tanning this money, and hold on to 1t as long as
they could by stroag fight. We answered
that we had, from the first. intended to offer to
divide the money with other banks OF the city
on, exactly, the terms we obtained It for,
believing that so long as the safety of the
citys money and the due pay ment of interest
thereon was assured, by its beng in the hands
of the community that it should be distributed
TO different banks so that as little mo ey
would be kept out of circulation as was consis
and distributing bank being one principa
thing that we desired, the proposal suited us
and we would accept his proposition We ther
made apositive agree ment on this basis, with
Mr.. Bonebrake and director of the bank, who
assumed to represent the five hanks in ques
tion. The amount of our bond was named by
you, and ere we had had time to demand the
fulfllment of tae agreement as to making II
Mr.. Bonebrake communicated with US and
stated that, very much to his regret, Wnat he
had promised could not be done. for the reason
that all the ave banks were pledged to act to
gether, and one of them, the California Bank
after the amount of the bond was fixed, had
refused to Join with the other banks in carryi ne
out the agreement; so that agreem ent, by
which the city would have at once commenced
to receive an interest amounting to between
SIS 600 and $4,000 per annum. was
defeated By an no institation oNn which IVA. was
money free of all interest. The bond,
however, was made by the City Bank, and l1st
before it was ready to be presented to your
honorable body a suit was brought by Jesse
Yarnell, stockholder of the California Bank,
to prevent your taking action on 1t, he alleging,
in effect, that as one of your City Treasurer's
bondsmen, his responsibility would be the
same when the eity's moneys were held by
banks under a bond required by you OF half a
million dollars, as now, when said moneys a. e
held by banks without any bond provided for
by law. At our own expense. we employed
counsel to assist your efficient City Attorney in
resisting this second effort at obstruction. and
it was defeated The bond was then presented,
and after minute and careful investigation
by that committee OF your body, consisting
of one-third of your mber. especially char ed
with this duty, was returned to you and duly
reported approved.
What was the next principal opposition
which was called out by Mr.. Bonsali's motion
to adopt that report? Less for your own infor-
nation than tina OF our fellow citizens and tax
PAYERS, who have right to know the reas oD
for what we, who are seeking the custody OF
their funds, may do, we say that 1t was voiced
by one single speech to your body from the
Honorable president, Mr.. Frankenfield.
Having discharged our duty to ourselves,
to you and to our fellow citizens, your
constituents in thus calling your atten,