The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1899-01-11
PURCHASE OF THOSE BONDS.
BOARD OF TRUSTEES DIS
CUSSED IT LAST NIGHT.
Attorneys Recommend Abandon
mend Of the Suit by
the City.

mend or the suit Dy
the City.
There Is friction between the Board
OF Trustees and the Mayor and Funa-
cd Debt Commission, and it is hard TO
predict what the outcome will be.
1t all arises over the city's bond suit
and the recent purchase by the FUNDED
Debt Commission of over S16O, OOO worth
OF the city's bonds in the months OF
october, November and December,
among them being the greater part OF
the bonds of 1888, which are the ones
In litigation Some two years ago or
more, some Of the Trustees being dis
satisfied with the way the citys SIDE
OF the suit was being conducted by
the Sacramento attorneys, made con-
tract with the firm of Bishop & Wheel
er of San Francisco to take the case
on a fee contingent on their winning
the suit for the city AS the charter
does not allow the board to make A
contract for more than year and the
case has not yet been determined, 1t
was necessary at the beginning of each
year for the board to- renew it, in order
that the litigation might be continued.
This was done last year, and was done
again at the first meeting of the board
after New Years.
Mayor Land, however, favored COM
prise with the attorneys, not believing
that the city could win the suit, and
on Monday night vetoed the contract,
when the board promptly and unani-
mously passed it over his head.
Mayor Land, in his messages to the
Trustees, has urged the wiping out of
the city debt in order that the tax
rate might be lowered and new bonds
be issued for the construction of var1-
Gus much needed improvements in the
city. He has never believed the city
could win it's suit and avoid the pay
ment of the bonds in litigation, and
has been opposed to the reputation or
them, believing that when the city next
wishes to issue bonds it would affect
its credit and make them difficult to
SELL
Trustees Bentley, Devine and some
others, on the other hand, hold that
the city received for the bonds very
little in proportion to their par value,
they being sold at a very low price.
They claim that, through manipulation
of the Legislature by the holders of
the bonds, they We're twice by law adj
vanced in price, instead of being sold
at a nominal price, at which they were
quoted previous to such legislation.
They claim that the holders of the
bonds have already realized several
millions out of them through this legis-
1ation, and therefore think that it is
perfectly legitimate for the city to beat
the suit if possible and avoid payment
of the bonds. and they do not look on
it as reputation, but simply as an eff
fort of the city to avoid being cinched
too heavily.
Such being the case, they have EN-
ployed the San Francisco firm, who are
confident they can win the case, on a
fee to depend on the amount they can
save the city from paying in principal
and interest The board shares the
confidence of the lawyers and wishes to
continue the fight.
Such was the state of affairs last
year, when the Funded Debt Commits
sioners, finding a large sum of money
in the fund, commenced paying off the
bonds and purchased large number
of the bonds of 1888, which were In
litigation, leaving only about S44, 900 of
them unpaid. This, the members Of
the board thought, would cause compli-
cations, as Bishop & Wheeler, under
the contract, could enforce payment of
their fee of $4,000. Such was the
situation when the board met last
night.
When the board convened all were
present except Trustee Bentley, who
was on his way to the East
Ex-senator Earl, representing the firm
of Bishop & Wheeler, addressed the
board. He said that the cases OF
Kendall against the City Treasurer and
Bates against the Treasurer have been
practically settled by the action of the
Funded Debt Commission. and nothing
is left for which to litigate except the
question of whether or not the city is
liable for the bonds and interest. His
firm had contracted to conduct the
suit in the interest of the city He
was aware that it was not the action
of the board that had brought about
this state of affairs. OF course, II an
individual should begin suit, and
agree to pay his lawyer a contingent
fee, and should settle the suit without
consulting his lawyer, he would be
liable under the law for his fee. His
firm, however, did not wish to hold the
board liable, and was willing to relin-
quish the contract for a reasonable
compensation.
Trustee Tebbets said he did not know
why the firm should be lenient to the
city. He thought that the litigation
should be continued. If the city could
be saved 100000, a fee of $4,000 was
not too much. He did not know whether
the Funded Debt Commission was al
mighty or not, and believed the matter
should be ferreted out and see if the
Commission can do as it pleases. IT is
a question of the legality of its actions
He had talked with lawyers and felt
disposed to find out If it has the right
If so, he would bow to it. He wanted
to know If it had a right to go ahead
without the approval of the Board
AS a representative of the Board he
wanted the question settled He
thought the firm entitled TO it's fee, and
If it will not settle for less than So, O0f
the Board wants it to have its fee and
hold those responsible who brought
about the present situation.
Trustee Devine said that all the
Board was aware that the bonds We're
purchased in defiance of the law, which
requires the Funded Debt Commission
Thin, pale and consump-