The San Francisco call., 1898-11-30

that time supply electrical appliances on its own responsibility. The Edison Electrical Company, of which A. R. Reese was at that time the manager was worked into the scheme to supply 1 the appliances necessary to the opera tion of the road. Sherman thus far, [ therefore. had secured without the ex- r penditure of a dollar the cooperation and unqualified support of the Pacific Bank. the Edison Electrical Company and the Pacific Rolling Mills. The Edi- 1 son Company was to supply the cleo 1. trical appliances. The Pacific Rolling Mills was to supply the power house, | rolling stock and. rails, and the Pacific + Bank was to give from it's vaults the money to satisfy in part, at least, the | claims of the construction company. ! Sherman. however. had evolved a l deeper scheme than the simple con- | struction. of a great railroad, He | wanted to float great bond issue, and in addition to what he ordinarily would have earned from the construction of | the road, he sought to win a profit from |; the inflated issue of bonds.
 1, Under the laws of this State, how 1 ever, no transportation company that had adopted electricity as motive l. power could issue bonds. It was neces- | sary for Moses H.. Sherman to secure the adoption of law by the Legisla- ture of the State legalizing electric mo- tive power on the same plane as other transportation companies using other motive power. While Sherman was .scheming some means to secure such legislative action the explosion of off, .cial anger occurred in the Pacific Roll ing Mills. James G. Fair, who was the principal owner of stock in the Pacific Rolling Mills and one of the leading packers of the cable railroad of Los Angeles, was informed that. some of the officers of the Pacific Rolling Mills and the Mcdonald family were Tn col fusion to injure his cable property to a very serious extent. There had been some friction between the Edison Elec- trical Company, and the Pacific Rolling Mills. Contracts which the Edison Electrical Company had received in connection with the Los Angeles Elec- trio Railroad having been fulfilled, the Electric Railroad . Company gave it's patronage to a competing corporation It was understood at the time that an officer of the Pacific Rolling Mills was the cause of this change of patronage, and the managers of the. Edison Elec- trfcal Company were: in consequence greatly angered. They detailed to James G. Fair some of the inside facts in connection with the construction. of the Los :: Angeles Electric Railroad They showed that a. s2. 100000 bond issue had been made upon an expenditure of s675;OO0.
 James c. Fair immediately became frightened at this most peculiar finan- eiaT~ transaction. He instituted an. ln- vestigation at once and he came seri- 'ousiy to the conclusion that Moses H. Sherman and the Mcdonald family were very shrewdly attempting to in jure him. Before bis inquiry had been concluded he forced several important changes in the management of the Pa cific Rolling Mills. One manager re- signed and another was put in his place. The investigation revealed the very interesting fact that several prom inent employees of the Pacific Rolling Mills and number of men high in the service of the Southern Pacific Com pany held large blocks of stock of the Los" Angeles Electric Railroad. Why
 
 James G. Fair could not understand. Those men over whom he had authority he forced out of his service and insisted that the Los Angeles Electric Railroad Company reduce it's enormous bond is- Sue:to figure that would more reason. ably represent the relation between the expenditure required by the construction of the road and the face value of the bonds. Even then James G. Fair saw that he was in an anomalous position. The Pacific Rolling Mills had practi- cally constructed the cable railroad of Los Angeles and at that time held nearly $200,000 of the bonds of this cor poration. The California Bank, the San Francisco Savings Union and several prominent capitalists and f1nanciers of this city and Oakland held many of these bonds, but Fair considered that it was impossible for him to evade the issue and he determined to stand by the contract of the Pacific Rolling Mills to. construct the Los Angeles Electric Railroad
 Fair determined, however, not to be caught again in what he considered to be trap. He sent one of his most trusted agents, A. J. Binney. to Los Angeles to oversee the work of con struction and to watch carefully that no thefts were committed. At that time the San Francisco and San Mateo Elec- tric Railroad was in process of con- struction under Behrend Joost and others and the manipulators of that concern were fearful that Fairs in- dorsement of the Los Angeles Electric Railroad would initiate against their interests The Pacific. Rnllinor AfiIIn