Los Angeles herald., 1891-05-17

on irrigation DOndS Dy CaSnler OSOrSe
L. Arnold OF the University bank, and
George II. Stewart, cashier of the Los
Angeles County bank.
Mr.. Arnold's paper is as follows:
The subject have selected to briefly
outline this evening is, the duty the
bankers of Los Angeles owe to the state
and community to assist in bringing
outside capital to develop its resources.
1t is not my purpose to mention the
many improvements that owe their ex-
istence to the fostering care and encour-
agement they have received from many
OF you, but to mention one, hat so far,
has received little attention at your
hands, which if thoroughly investigated
by you, and if found deserving, which
have little doubt it will be, would with
your endorsement bring into this state
within the next year, over $40 600, 900 of
outside capital. | refer to irrigation dis
trict bonds issued under the Wright act.
If fully investigated we find safeguards
thrown around this class of securities, for
the protection OF investors, which no 9th
er bonds have been accorded. Time will
not permit me to call your attention to
all of these, but mention only one or
two of the more important ones. The
special committee of the chamber of
commerce of San Francisco, which body
was asked to meet and confer with dele
gates from the irrigation convention and
state board of trade found: "that bonds
issued bv irrigation districts in the state
of California under the Wrightirrigation
law, are a safe investment and excel
lent security to investors. provided the
two following conditions are complied
with:
'First-A careful investigation as to
the compliance with the requirements
of the law prior to the issue of said
bonds.
"Second-An examination of the char
acter of the lands on which it is pro-
posed to issue said bonds and the facility
for obtaining a water supply"
This report would seem to imply that
the first condition would have
to be carefully investigated by party
contemplating investing, that each and
every step, from the first petition to the
board OF supervisors down to the sale
and delivery of the bonds, would have
ney, or one familiar with all the laws.
before one could safely purchase any of
the bonds. This trouble has been saved
the purchaser by Mr.. Wright, the author
of the bill, under which this class of
securities are issued. He saw that this
would be a bar to the successful placing
OF the bonds, and with that good iudg
ment which he displayed all through the
bill places therein the following: The
directors of the irrigation district shall
file in the superior court of the county
in which the lands of the district or
some portion thereof are situated, a
petition praying, in effect, that the
proceedings of the organization, and all
fhin4s- taininS-tho-oto,- may be GA
amined, approved and confirmed by the
court. And the court shall fix the time
for the hearing OF said petition,
and shall order the clerk of
the court to give and publish a
notice of the filing of said pc
tition. If upon the hearing the court
shall approve and confirm the issue and
sale of the bonds, and no appeal shall be
taken within ten days, it is final. She
supreme court of the state has just rem
dered decision that makes this part of
the bill beyond question; hence the first
condition should be: Have the bonds
been confirmed by the superior court,
and has the time in which to appeal gone
by? If so, each and every step has been
made regular ana valid.
The secnnd condition is what every
man should fully inform himself upon
before purchasing any of this class OF
securities. To you who are acquainted
with the fertility of the soil of Southern
California, the second condition would
simply be, Has the district a sufficiencv
of water? With this answered in the
affirmative, we take no chances when we
A. ta;a "A hnn do
are good. That this is asked of us, that
we owe it to our people to answer one
way or another, l beg to call your atten-
ton to the following letter.
Inasmuch as the whole of Southern
California is dependent on irrigation, he
thinks that the omission is a serious
one. He further says: Thinking read
ers will find out this peculiar lapsus and
it will make them very cautious, as they
will certainly conclude that irrigation
could not have big Importance, or that
there are plenty of difficulties, uncer-
tainties, risks, ETC., connected with lrrl-
CATION otherwise the bankers would not
have avoided speaking about it at all. u
This gentleman is an investment
banker for American securities, and has
been selling district bonds, stocks o1
Redlands, Bear Valley and water COM
panies, etc. He therefore thinks that
the irrigation matter is OF great i'm
portance to his work as well as to Calf
fornia, and it depends largely on the
opinions of our bankers about irrigation
securities whether or not he shall be
able to do large business in this line
of securities.
He suggests whether or not the bank
ers could not get out another statement
that would cover this irrigation busi-
ness, or to supplement the article al
ready published with view OF irriga-
ton matters, irrigation bonds, etc.
l believe if your bankers could get out
q good conservative statement on irriga
ton bonds, backed up by the supreme
court decisions, that it would have q
good effect in bringing foreign capital
into this country, by assisting us in
placing irrigation district bonds
Of course, the bankers can only
endorse the general principal
and each districts bonds
would then have to stand on its own
merits, so far as the bonded indebtedness
is concerned, as compared with the val
uation OF the district. You could refe1
TO the standing of confirmed irrigation
bonds: bonds that have been confirmed
by decisions Of the supreme court.
Please let u1e hear from you on thi:
matter. Anything that you can dr.
ought to be done promptly, and | thinl