The San Francisco call., 1898-11-29

of the intense COmpetlLloH DelWeel lHe two great street railway corporations of Los Angeles. Every effort, however, to prevent the publication Of the article was in vain, and when both news papers appeared on the following morning with the statement that the Peoples Home Savings Bank had un- wisely accepted the dangerous securl- ties of the Los Angeles Electric Rail- road the run on the institution 1ol- lowed. The bank, as already descrlb- ed. was fortunately saved by the time ly arrival of gold from the Pac1hc Bank.
 Sherman had now advanced very far in his scheme. He had behind him the tremendous resources of the Pacihc Bank and against him the Bank Of California and several other powerful institutions in this city.
 The war between Sherman and Crank and the electric railroad and the cable railroad of Los Angeles became more bitter. Those who had invested hundreds of thousands of dollars in this concern recognized that one of two alternatives must De accepted. One or both of the roads must be destroyed as the result or the war or both roads would nave 10 De consolidated. After the run on the Peo- n1e's Home Savings Bank there were series of negotiations between repre- sentatives of the electric railroad ana those of the cable railroad. Time after time these men met and discussed the situation.
 John Mckee who was at that time president of the clearinghouse ana cashier of the Tallant Bank, and Lowell White, the president of the San Fran cisco Savings Union, sent for Frank Mcdonald and Sherman. There was a preliminary conference, each represen- tative discussing the interests he pos sessed. White in his official capacity as president of the San Francisco Saw fngs Union had quarter of million dollars in bonds of the Los Angeles Cable Railroad. Mckee, as agent of the Protestant Orphan Asylum of this city, had s5O.OO0 of these bonds. The Bank of California in it's own capacity and in it's relationship with the Pacific Rolling Mills had nearly two hundred thousand dollars in these bonds.
 A series of conferences, as already described, were held There were infor-
 
 | in this city and long consultations at the rooms of Sherman in the Baldwin Hotel. It was at first decided, after the representatives had determined to consolidate both roads, that S4,OOO,0O issue of bonds would be made. This was subsequently, changed to S3,OO0,- 900 issue, in which $221. 900 remained for outside parties after the cable interests 1 and the electric interests had been l satisfied.
 In arranging an equitable distribution of the bonds between the cable railroad and the electric railroad Sherman de- manded that the company be given sixty bonds. representing S60.e00, which | Moses H. Sherman declared was neces- sary to cover his expenses in "greas- ing' the City Council of Los Angeles.
 In the negotiations there was much discussion over this item. Sherman in- 1 sisted that he had paid the money in l bribes and he must become compen- sated or the deal would not be effected. 1 The other representatives finally accpt- ed Shermans terms and he received the bonds. This incident was the last in the negotiations that eliminated In the | consolidation of the two roads.
 | In the preliminary stages of the war | between the electric railroad and the cable railroad, when James G. Fair | worked a revolution in the Pacific Roll | ing Mills and demanded an accounting from Sherman and Frank Mcdonald, there was no discussion of the tremen- dous item that Sherman claimed rep resented bribery or, as he termed it, with a wink, "greasing."
 James G. Fair was a thorough man of the world, practical business man who understood the efficacy of ringing arguments when sometimes made to public officials. When Lowell White and l John Mckee were asked, however, to 1 audit Sherman's "greasing fund" of sixty thousand dollars they hesitated. l They did not possess the wide range of knowledge that Fair displayed. Unlike 1 him they did not know the busy scenes of Legislatures and the ways that are
 devious and dark in the chambers of | City Councils and Supervisors. But | Mckee and White had willing instruc- tors. Mckee particularly had been in- i troduced by Shermans friends to the | grapevine route that frequently leads | to official favor. He and White listened l patiently to the arguments in favor of l Sherman's "greasing fund" Both gen tlemen were resting in easy digestion | of a comfortable dinner and with a 1 shrug of the shoulders and a genial
 smile they acceded to Shermans de- mand and the compact was complete. 1 If things were as they were and in the
 natural ,course of events had to be the only alternative was to submit. Messrs. White and Mckee had some aspirations to be considered philosophers as we'll as bankers.
 The union of the two concerns was effected in 1892, and the new corpora tion became known as the Consolidated Electric Railway Company of Los An geles. Sherman, as matter of course
 remained in control. He demanded in the new issue of bonds that two years
 interest be sacrificed " the bondhold- CTS. This new issue of three million of
 dollars earned nothing. therefore, dur ing the period of two years which Sher- man demanded. The manipulator had
 absolute dictation of all the affairs of
 the road, which, it is claimed, earned