Los Angeles herald., 1907-10-23
BANK SEEKS
TO DOUBLE
ITS PROFIT
WOULD EAT CAKE AND STILL
HAVE 1T
------
EXPERTS DECLARE NEW ELEc-
TIoN ESSENTIAL
Mayor Farley Takes Advice Of City
Attorney and Makes Public Part
of Correspondence of Dillon
G. Hubbard
pY I. GEO. rHoMpsoN

% Il UEOs
The publication in The Herald yester-
day of a part of the history of the water
deal has already begun to have its effect
upon the minds of the people and it is
the purpose of The Herald to show how
the deal was planned and how it was
frustrated, also the facts relative to the
parts played by the various administra-
tions will be given and an attempt made
to show the present position of the city
and the water companies in the matter.
When the Waterhouse administration
went into ONCE the water bonds had al
ready been offered for sale and the First
National bank of Pasadena had bid for
100000 of the issue, to be paid for at par.
There was also bid for the 'Narrows'
bonds from an eastern buyer. All of the
proceedings relative to the "Narrows'
proposition were found to be in proper
form and the deal was consummated
though not without some trouble and con-
siderable haste on the part of the execu-
tive. as the date of sale was approaching
SO rapidly that it was by only narrow
margin that the bonds were duly certified,
signed and delivered, which process neces-
STATED two round trips for the papers be-
tween Pasadena and New York city.
AS recited in The Herald of yesterday,
the matter of the two large companies,
the Lake Vineyard and the Pasadena
Land and Water companies, was found
to be in an uncompleted state and liti-
cation pending against the West Side sys-
tenn. Upon investigation of the condition
of affairs City Attorney Fitzgerald adj
vised the mayor that it would not be adj
visable 10 sell the bonds until there was
some assurance that the sale could be
consummated.
Urges Sale
When Ernest H. May learned that the
nj. M.
president, was likely to be delayed in get
ting possession of the bonds, he strongly
urged the mayor to consummate the sale
| Of the securities which his bank had bid
on. He was insitent on the matter and
the mayor was as firm as Mr.. May was
pressing.
When the mayor asked what he could
do with the 100000 he was told by Mr..
May, why you can place it in our bank
until you need it,
That was two years ago and over and
the money is still unneeded. Had the
sale of the bonds been consummated as
Mr.. May so much desired the city would
have been forced to pay over two years
interest on the money which would have
been on deposit in the bank which loaned
it, and as the saying goes, Mr.. May would
have been able to have his cake and eat 1t
too. 1t was significant to some minds
that some of the most energetic workers
for municipal water are closely allied
with the interests of the First National
bank of Pasadena, and as soon as ex-
Mayor Vedder stepped out of office at the
close of his term he accepted the position
of cashier of the savings bank affiliated
with the First National bank.
Mr. Mays advice to the mayor might
easily be excused If one considered only
the interests of the stockholders for
whom he works, but for the city to have
followed 1t would have been rather ex-
pensive.
Decide to Ask $85
At a meeting of the stockholders Of the
Lake Vineyard company it was decided
that sS5 per share would be about the
right amount to ask the city, notwith-
tsanding the objection that is credited
to c. M. jacques, who protested that he
was able to buy the stock In the open
market at S35 per share.
OF the total number of shares into
which the company had divided its hold
ings there were at the time OF the bond
election 265 shares as near as can be
ascertained, still waiting to be issued in
exchange for the original shares at the
rate of ten to one. If the deal had been
carried out as was planned the company
would have been unable to deliver to
the city those shares. At the rate of
$S5 per share they would have amounted
TO SIZoZ0. rAIler Ine SlOCknOlu6rS .nAu
been paid their pro rata on a basis OF
sS5 what would the directors have done
with the $22,525? AS the directors are
men of unquestioned honesty and unim-
peachable integrity no suggestion of graft
can possibly be attached~to them.
Whep Mayor Farley was asked a few
days ago to allow The Herald represen-
tative to see the correspondence between
Dillon & Hubbard and the city on the
water question the request was at first
refused. Finally part of the corre-
spondence was shown covering the time
that Mr.. Willett was city attorney. This
was the correspondence referred to In
Yesterdays article that was so long de-
layed in reaching Mayor Waterhouse
Secrecy Advised
When asked to allow the subsequent
CORES pondence with the late City Attor-
ney fitzgerald the mayor replied that
he had been advised by City Attorney
J. Perry Wood not to make the subject
matter public.
The mayor did, however, tell the news
paper representative part of the con-
tents of the letters. but rot for publi-
cation. Today after the story of the
water deal was printed in The Herald
the whole correspondence was given into
the hands of the press, with permission
to use the final letter of Dillon Hub
bard 10 Attorney Fitzgerald.
Attorney Fitzgerald asked Dillon &
Hubbard sTs not the only safe course
open to the city either to enter into new
negotiations with the water companies
to obtain a definite agreement with them
as to the property to be acquired and the
amounts to be paid therefor, and then
submit such definite proposition to the
vote of the electors, or IL agreements can
not be made with the water companies.
then to take condemnation proceedings II
the city should so desire2''
In reply Dillon &c Hubbard said; IL
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