Los Angeles herald., 1908-12-02
CITY OWNS S.P.
STOCK WORTH A
MILLION; LOST
MYSTERY IN DISAPPEARANCE
OF SECURITIES
COUNCIL WILL BE CALLED ON TO
EXPLAIN
Attorney Robert c. Loucks Looks Up
Record and Finds Municipality
Has Holdings Never
Accounted For

II m ! AAGA AAcAS RSNC4A4C III AA4C
w $1,000,000 worth of stock
" the city of Los Angeles
owns in the Southern Pacific rail-
road?
What has become of the $2,000,-
600 worth of stock the county of
Los Angeles owns in the Southern
Pacific railroad?
These are pertinent questions Attor-
ney Robert G. Loucks asks of the city
council and the board of supervisors.
In letter addressed to the city coun-
ell which he mailed yesterday and
which the council is bound to consider
next Monday at its regular session,
Attorney Loucks propounds problems
that yesterday made City Treasurer
Hance and City Clerk Lelande look
anxiously to their bonds. Neither of
these city officials can be accused of
any connection with the disappearance
of this stock, but, according to public
records, this stock should be in the
keeping of the city treasurer and the
city clerk should have a receipt for it.
A careful investigation conducted by
Mr.. Loucks, City Treasurer Hance ond
City Clerk Lelande yesterday failed to
reveal either stock or receipt.
The same is true in the county Of
fees. The county treasurer should
have this stock and it is nowhere to
be found, it is declared.
Bought Stock at Early Date
The history of this stock dates back
to the end of the Civil Wan In 1866
Senator Phineas Banning appeared be-
fore the city council and the board OF
supervisors to present the cause of the
Southern Pacific, then known as the
7 o CO Da1r "a Z
the representative of Coils p. Hunt
ington, and his colleagues who built
the railroad and formed the organiza-
ton behind it that now dominates Cal
ifornia politics..
Senator Banning asked the city and
the county to cooperate in inducing
the state Legislature to pass a law
making it possible for municipal corr
porations to issue bonds and buy stock
in this railroad. The city and county
of Los Angeles enthusiastically lent its
support to the plan, the bill was
passed and the city issued bonds for
S75, 900 TO buy stock in the Los Angeles
& San Pedro railroad. The county OF
Los Angeles issued bonds for S150,00O
to purchase this stock. Blocks of stock
representing these amounts We're
transferred to the city and county OF
Los Angeles and entrusted to the
keeping of the treasurers of these cor
porations.
Where is this stock?
Now Worth Million
No dividend was ever paid, either the
city or county of Los Angeles on TINS
stock. and, according to the figures OF
E. H. Hartman, himself, the city's
share should now be worth $1,O00,0oO
and the county's just double that sum.
This stock could not have been trans
ferred, for in the enabling act that
made it possible for the city and
county to buy stock is clause that
prohibits it's transfer without the con-
sent of a majority of the voters. This
consent has never been obtained.
If as it appears. the stock turned
over to the city and county was later
obtained by the Southern Pacific by
some unfair means it does not alter
the fact that the consent of majority
of the voters was not secured and the
city and county still legally own this
stock
of Los Angeles put up these sums,
said Mr.. Loucks when interviewed at
his office. 616-617 Merchants Trust
building, "but nearly every city and
county in the state and the state itself
issued bonds and bought stock Ihey
may still be in possession Of their
stock. but it is certain Los Angeles
only Stockton Refused
"Only Stockton refused to issue
bonds and everyone knows what hap
pened to Stockton. Sacramento re-
fused TO issue bonds a second time
and the Southern Pacific has wreaked
its vengeance on Sacramento
"In May 1868 the county tax rate
on these bonds alone was so cents on
the 500 and half that amount was
paid in city taxes for the same pur-
nose making 80 cents for that year
alone for the Southern Pacific stock.
"The state issued $1,500,000 in bonds
and gave the money to the southern
pacific. the supreme court at that
time setting aside the state constitu-
ton in order to make this possible.
Mr.. Loucks believes the question OF
this stock is especially pertinent at
this time, when Los Angeles IS con-
templating a method whereby II can
construct a connecting line between
Los Angeles and San Pedro.
at gives a peculiar flavor TO the
transaction to find Senator Phineas
RAINING so Antimately connected with
the matter" said Mr.. Loucks SEN
ator Banning was largely instrumental
i'm the construction of the Los Angeles
e San Pedro railroad, and now the
harbor commission has brought suits
10 recover tide lands from the de-
scendants of Senator Banning.
Mr.. Loucks did not go into this mat
ter unprepared. He declares ne nas
studied it in every phase for the last
two years.
Asks Counsel About It
His letter to the council is as fol-
lows: p ,oos
Honorable Members of the Council. City OF
Los Angeles, Cal.
cientlemen: Now that your board IS taking
steps to place Los Angeles on the maritime
ocean front, it may not be amiss to call your
attention TO the fact that Los Angeles city
is already interested in n railroad from this
ojty 10 San Pedro by reason Of the purchase
and subscription by the city Of $4,000 stock
OF the Los Angeles & San Pedro Railroad
company, which at this time according TO
HarrImen's figures, should be OF the value OF
at least $l,O00000
Senator Phineas Banning In 1866 appeared be-
fore the legislative bodies Of the county OF
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