The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1907-06-24
Continued from paso one)

lIiil water syatem Ia 1890 ther
have been four reductions IN vat
rates. one OF &c per cent IN Jul
1894. one OF 10 per cent on January
1. 1896. ona Of 20 per cent whei
the Cedar river main was eoWplel
Oh and Que of 20 per cent In 1905
Ia other words tho rates now undo
municipal ownership are but about
hals what they were under private
ownership. Hut even now the Ia
ouma OF the system over and aboyr
operating expenses amounts 10 az
pro3imately half million dollar
a year THAT IL. with pflyate own
erahip Of the plant the private avn
afa would now have been In a po
sltian 10 tax the people Of Seattle
Ia water rates for disbursement
among the holders ~ partly ncti
tloua securities nearly a million
dollars per annum. an Income
which would give those saeuFitie.
a value Of $4,000 ono to $50 000 900
With this a. a prize TIE coyetoua
Interests" wagcd a political con
teat against the people of Seattle
covering more than bali a acafe Of
years and 90 which there are atll'
traces in evidence Ia municipal pc
llties
Finds Itself auncoedi
Ono of the first obstacles On
countered BY the city in its efforts
90 finance the construction OF the
Cedar river nYntem that il one Of
the frat after ila defeat Of the con
aoliiafed plnnderbnua In the lpeeiai
election q 1851. VAS the discovery
that u had been hunooed IN w.
original purchase Of the old water
system In October tsg0 from the
Spring tiiIl Water company
This discovery was made On
November. isas. and With II the dls-
closure u a piece of tFsn1ied ~
naueeoriug which for cool dzFinF
In both conception and skecu,ion ln
without a parallel in the history of
Seattle municipal finance.
The city. be u refnemhered. haa
purchased the old aystrm October
~. 1890. from the Spring HAL com
panY, paying therefor tbs sum az
t36z. aSa - and received aar.
fHutes deed fnf the plant real 81
tate and ether property THIS dned
u recorded on psga as Of volume
no Of dsesis In the county auditor
office.
At the time this full waFEantee
deed was passed for consideration
there was outstanding a mortgage
In trust against the plant and prop.
rrtY thus sought 90 - conveyed f0g
so 600 held hY the Puget 91anf |
National Rank and due In Noxsu
Der 1895 While not 80 provided |
In the deed Il was understood By /
the officers Of the water company
that theg wouia apply $50 600 of the /
price rccelssd for the property Ca
the eancellatian % the MORTGAGE /
This SO. 300 vas 40 set Aslde % the +
company and turned over 20 NJ
Fnrth rs truntee Hnt instead - /
paying off and eAncaiilnE tho uaarg
Esgs 80 a. 10 make good tho war |
ranies deed which the company had
given the city Mr Fnr,h permitted /
the & per cent mortgage 20 rnu
and teamed The &C.. coo 10 Edward !
T. Terry ~ per cent en real e.
tate mortgage security for use IN
the erection Of the building nov
known As the Hotel Norshsrn.
Knew Nothing Of Morteage.
Meanwhile Mr. Fufth. fos The
company krps up the lnsareat or /
tho honds outstanding against tn
water 8stsm and city offtcial
came and went through successive
elections without thu faintesg idea /
that tho city water sysiem had
$4,000 mortgage outstanding |
against u.
The vaterworkn bonds. secured |
by fhs mortgage cnme due IN No
vcnb~r. 1885. tho Terry mortgage |
had not been paid. and the bond |
holders called upon the city lfust |
as the city Was about 10 undertake
10 finance the new water supply |
system on the earnings of tho
piantl. for their $4,000. The city |
denied knowledse Of the bonds and |
mortxaEa. claimed 10 Be IN full Law
fui possession Of the water system
and called upon the then asfunct |
company 20 cancel the obligation
and make good ltH guarantee Of tho |
citys title
The boudholders then turned "a
their trustee the Puget Sound Ma
iioaai Hank and Jacob Furth. who
~ acting president of the Spring
filli Water company. had in 1890
guaranteed the title "a that prop-
erty. as president Of the Puget
Sound National Bank In 1897
brought suit attacking that Euaran-
tee and saekiua TO compel the CITY
20 pay OFF the $50. 600 IN bonds
This suit dsaFsed along through
1898 and In December Of that wear
Superior Judge Orange Jacob.
granted decree 81 foreclosure
against the city and in favor or
the plaintiffs for the principals ana
interest Of the bonds together with
the costs Of the suit
City Sues For Title.
Meanwhile the city had sued the
then defunet Spring Hiu Watef
company on tie guarantee OF the
title 20 the property and Superior
Judge W. " Moore fnow Mayor
Aoorel. appointed r. r. Trsmper
receiver for the company with In.
struetious 10 levy an assessment
upon the stockholders sufficient to
repay the mortgage and clear tho
Ute which the company had war
ranted. Through this SUIT and aub-
aequsnt proceedings the city was
finally made whole from the fore.
closure Of the mortgage. but tho
legal proceedings served for fully
two years 10 cloud the city's title
To ita water system and render DIFF
ntcuit. II not impossible. the flnanc-
ing OF any further Indebtedness