The herald., 1898-04-27

flnancier will tell you 1t cannot be done.
The city by our plan would reap an income
which from the start would not be less
than $4,000 year, and would steadily in
crease. 1t could not do as well under the
most advantageous circumstances IL 1t
undertook to manage It's own plant.
But, as / said, 1t is purely business
proposal. If the city wishes 1t, 1t will be
accepted; If 1t does not, 1t will be refused.
We are desirous of investing our money
here, but If you do not wish 1t we will
have to find some other place. should
think that the fact of having several mil
lions In cash to be expended here at once.
besides the large amounts that the owners
of the company will receive for their hold
ings, which would doubtless be invested or
expended here in one way or another,
would be factor to be considered In
these times, sums like those dispersed in
a community are not to be sneezed att
Mr.. Woltmann will remain here for some
little time, or until he hears one way or
the other from the council.
The Proposed Plan
The plan offered by the syndicate in de-
tail is as follows:
'Messrs. Kessler G. Co., the well-known
bankers Of New York city, having interests
In the City of Los Angeles of a nature such
as to make it highly desirable to them 10
promote in every way the progress of our
city, have had their attention called to the
controversy in which the City of Los An
Seles Is now involved concerning its water
supply, and having examined into and
considered this matter after it had been
submitted to them by certain gentlemen
connected with their house, have author
lied me to present to you a proposition
which they are confident will lead to So
luton of all the difficulties at present ex-
listing.
1.-The waterworks question as it stands
today presents a most perplexing aspect
iii all directions. While there has been
and probaly is now, a sentiment In favor of
municipal ownership of a system of water
works, nevertheless every plan that has
been or can be devised whereby that end
might be accomplished must necessarily
involve the issue and sale of bonds, either
for the purchase or construction of such a
system.
''The legal difficulties of providing funds
for that purpose are such as cannot well
be overcome. The constitution so limits
that a system Of waterworks cannot be OBJ
tanned by the city by any other means
than the issue of bonds. Even IL sucn
bonds were voted by the electors, it Is al
most certain that they could not be sold
owing to the present state of the legisa
tion of California. BY the act providing
for the issuance of bonds for refundng
municipal Indebtedness. passed March 8,
1897, the only statute which provided for
the issuance of bonds for public improve
ments generally was expressly repealed
and have been advised that leading law
yers of this state have pronounced such
t0nd issue absolutely void.
aside, however, from the financial diff
f1culties just referred to, there is the litiga-
tion now pending in the supreme court
over the headworks site; the case against
the Crystal Springs Land and Water COM
pany In the superior court not yet finally
submitted; the litigation In the Federal
courts between the same parties now
pending In the supreme court of the United
States; and the litigation with the West
Los Angeles Water company in the SUI
perior court not yet tried.
1.-THE dangers, expenses and delays OF
this litigation mean, on the part Of the
city, the outlay Of large sums of money
to say nothing of the loss of years of time
During this period the present works
| would necessarily be at a standstill, be
cause it must be evident that the owner:
could not reasonably be expected to inves,
further large sums for improvements OF
extensions while the dispute or litigation
concerning their rights might exist
,,la 1rhio
are prepared to submit to you will give the
city all of the advantages which might ac-
crue from municipal ownership, unattended
with any of its burdens or risks and with
out any increase of the municipal indebted
ness. Messrs. Kessler & Co. have in the
course Of business, acquired considerable
interests in the city of Los Angeles, and
hence are disposed to invest further capt.
tai here. Being convinced that an arrange
ment can be proposed to the city of Los
Angeles satisfactory to said city, they
have already commenced preliminary ne
gotiations with the Crystal Springs and
the Los Angeles City Water companies,
and have become satisfied that If they can
make suitable arrangements with the city
the entire situation could be adjusted 10
suit all parties, and all litigation ended
satisfactorily.
IF a contract can be made with this
city, Messrs. Kessler Il Co. would be will
ing to at once expend whatever sums may
be necessary to put the present plant In
first-class condition, cover the reservoirs,
and otherwise improve the plant so as to
make 1t thoroughly modern and adequate.
They would supply all the municipal build
ings and municipal needs of the city of Los
Angeles abundantly with water. including
that required for fire protection and for
street sprinkling, free of charge, and in
addition thereto, would pay the city an
annual revenue based upon percentage
on the gross income of the company. The
income thus derived by the city would, If
properly invested. in time enable the city
to acquire and pay for the works without
the outlay Of dollar, or the issuance Of
bonds.
'If contract upon the terms above in
dicated could be made for a period suffici-
emily long to protect Messrs. Kessler IL
Co., we believe that the city would thereby
obtain all of the benefits of municipal
ownership without It's burdens; and as the
constitution of this state for all time gives
to the city council the power to regulate
the rates to be charged to the consumers,
no rate can be charged by the company
arbitrarily, but only subject to the reason
able regulation Of the council. Unless a
contract were sufficiently long and GER
tain, Messrs. Kessler & Co. would not he
diately necessary to put the water plant in