The San Francisco call., 1896-11-24
|SEATTLE'S COSTLY
WATER SYSTEM
Plant Bought by the City
Found to Be Heavily
Incumbered.
Californians Hold Bonds Worth
a Third of a Million
Dollars.
Were Believed TO Have Been Taken
Up Before the Property Was
Acquired.

SEATTLE, WASH, Nov. 23.-Califor-
mans who hold $50, 900 worth of bonds OF
the Spring Hill Water Company, corpo-
ration which in years gone by did big
business in this city, sprang q sensation
to-day when they gave the city of Seattle
notice that the bonds are now due and
owing and that they have trust deed TO
the city's water plant to secure them
Tonight the City Council discussed the
matter, but was unable TO reach any con-
clusions, and what the outcome will be it
is difficult to say. The CaliforHians hold
another issue of the Spring Hill Com
pany's bonds. amounting to $3.50, 600.
These do not fall due until 1905. but when
that time arrives it is expected that they
will call on the city to pay them also.
The Californians who hold the $50, 600
issue and who created the sensation to-day
by demanding payment are Myer Lewis,
Hattie Heller, Leopold Bachman, K. and
s. Heller and Herman Alexander. Lewis
holds $40, 600 worth of the bonds, being the
heaviest involved. The city supposed that
these bonds had been taken care OF by the
Spring Hill Company.
the water supply of Seattle was origin
ally controlled by sever raj gentlemen
known as the "Spring Hill Water Com
pany." To increase its facilities as the
city grew the company in 1886 bonded the
property for $50, 600. issuing ten-year
bonds and making the Puget Sound Ma
tional Bank trustees of the property to
secure the issue. On May 1, 1888, second
issue of bonds was made, amounting TO
S250,000 and running tor twenty years.
ese bonds are still out and unmatured.
This made an aggregated Indebtedness OF
$500, ,0C0
In October, 1890, the Spring Hill Water
Com pany sold its entire plant to the city
OF Seattle Tor $352, 265 g. executing to the
city warranty deed of all its property,
which of course conveyed the property
Tree and clear OF all membranes. 4"
Nevertheless these trust deeds were still
out, and the bonds were unpaid and un-
Cancelled. The first issue of bonds was
sold in California. They fell due on No
vember l, 1896, and demand was made on
the Spring Hill Water Company for pay
ment, but refused. Now the bond holders
In California have served notice on the
city, the lawful ownersof the equity of the
water company's property, asking that
the same be paid.
The transaction whereby the city ac-
cepted this property and paid out over
1852, 600 while these trust deeds were still
uncanceied shows laxity on the part of
the city officials of 1890 scarcely paralleled
in the history of municipal purchases. 1t
Is claimed by the city that when it bought
the companys water plant the under
standing was that the company should
take care of the bonds. But there was
not, it Is said, any written contract ana
the Spring Hill Company is now defunct.
The president and vice president are dead
Jacob Furth, president of the Puget Sound
National Bank, said to-day that the COM
pany would take care of the bonds, but
the fact remains that the demand for
$50 200 has been made and refused.
Inc bOndhOiders have truSt daeds or the
plant now owned by the city, and the be-
lief is that the city, before 1t can get
good TILE to the plant, will have to pay,
In addition to tn. sum already paid.
$50, 900 for the one bond issue and $3.50. 600
for the issue falling due in 1908.
All day long the city officials have been
In consultation over the matter, but to-
night they admit they are still at sea.