The herald., 1896-04-28
The City Attorney Suggests q New Plan to
Refund

The City Attorney Suggests . New Plan to
Refund
The finance committee filed yesterday
with the council the following, submit
ted by the city attorney:
At your request l have examined the
question of refunding the old debt of
the city under the recent decisions of the
supreme court. The opinion of the court
is favorable to the city on every point
discussed or raised by the attorneys for
the prospective purchasers of the bonds
attempted to be issued last year, and in
view of the fact that the court has de-
cided the constitutional questions which
were considered of greatest Importance
in favor Of the city, have determined
that it would not be wise to file a pc
tition for rehearing Of the case simply
because the court has decided that the
bonds must be made payable in this city
instead of New York. as heretofore. 1t
is, of course, desirable that interest and
principal coupons should be made pay
able in New York, for the convenience
of the bond buyer. But this is not
vital matter. and in my opinion, when
bond buyers understand that the
decision or the supreme court
makes it necessary that our
bonds should be made payable at the
office of the city treasurer, the value of
the bond will not be affected by this
change. AS l have said, I am therefore
of the opinion that on a rehearinsy of the
matter we would have little to gain,
with the possibility of much to lose. Not
only our municipal bonds, but the
bonds of every municipality in the
state so far as know are all issued paw
able in some eastern money center and
we could not have anticipated the over
turning of this we'll settled practice
utter many years upon constitutional
grounds. 1t is. however, the law now
nd or dyyie,n tI,nf
issued must be made payable in the city
of Los Angeles.
The decision of the supreme court is
somewhat uncertain as to the different
steps to be taken in the issuance of
bonds for refunding, but am of the
opinion that the proper procedure will
be for the council to authorize the is
Suance of the bonds, as provided in the
act of 1895. This will be a very mex
pensive procedure, as an election will
not be necessary, and there will be prac-
ticaily no expense, excepting for pre-
pairing the bonds and making the ten
Ger provided in the statute Of 1895. The
fact that such an attempt will cost very
little. and the benefits to be derived
from reduced interest very great, leads
me to advise that this refunding be at
tempted at once.
It will be found, however, that the
old debt proposed to be refunded last
thousand dollars. issued in 1877, will be
cue IN July. 1901, and this issue would
aoVlse be paid when it becomes DUE and
no attempt be made to refund it. The
issue .asu is very small, and being prior to
l1eU, q olnerent proceeding would prob
aDiy pe necessary. This will leave a
ralance OF something like $780, 900 which
may De refunded under this act
=. may not be out of place, in view of
tne 1act that some question has been
raised as to the legality of the bonds
heretofore issued and PAYABLE in east
ern cities. for me to say that in my
opinion the decision of the supreme
Iourt ooes not in any manner invalidate
Donos winch have been issued and sold
Rayapie, principal and interest. in New
ork. A ra1r construction of the decis-
ION would seem to hold that such q. nro-
vision could not be enforced. and that
tne owner of bonds which Contract on
their race to pay their principal and IN
terest IN the city of New York would
simply De required to present his con-
pons at the office Of the treasurer in This
city, instead of at some bank in the
east. 40 ''AS
If the suggestions made by me are
adopted by your committee, I shall he
pleased TO meet with you and prepare
the preliminary steps necessary to car
Rry out my suggestions.
The suggestions contained in the