Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1908-07-02
CHANGE DELIVERY
CLAUSE in BOND
SOME MODIFICATION MADE IN
AGREEMENT
CITY SELLS SECURITIES WHEN 1T
WANTS MONEY
Aqueduet Funds Exhausted and Board
of Public Works Refuses to Let
More Contracts for
Material

The bond agreement that w. b.
Mathews, aqueduct attorney, has ar
ranged with the two firms of New
York bankers will be presented to the
council in modified form at its session
next Monday. The option clauses will
still remain the same and the AZ per
cent interest will remain, but the de-
livery clauses Will be changed to con-
form with the ideas expressed by coun-
cilmen at a session held with the board
of public works Tuesday morning. The
deliveries will be so arranged that the
city need sell but s4,000.000 or $5,000,000
worth of the bonds in each fiscal year,
as it pleases.
This will make an appreciable diff
ference in the total amount of interest
that will have to be paid on the entire
issue Of owens river securities.
The aqueduct commission and the
board Of public works held long ses-
sion in the aqueduct quarters yester-
day morning at which the coast rep
resentative of A. b. Leach & Co. and
Kountze Bros. was present, and this
point was finally determined on.
Mr.. Mathews explained at the con-
ference that he found 1t impossible,
after three weeks work, to dispose of
the bonds at A per cent, or at any
price under AZ per cent that did not
include the options on succeeding is
sues of the bonds. Leach and Kountze,
he declares, offered the best premiums
of any of the Wall street bond bro
kers.
Reasons for Haste
The coast representative of the bro
kers explained at the conference that
the options were necessary, as they
had to Immediately begin to find a
market for the succeeding issues, and
unless they could be assured that they
would be allowed to deal in the bonds
to the conclusion of the entire issue
they did not feel justified in taking
the first installment of S2,040,000. which
is offered them at Az per cent.
Meanwhile two reasons for haste con-
front the board of public works and
the aqueduct commission. The aque-
duct funds are practically exhausted
and the board of public works for the
last two weeks has refused to make
any contracts for much needed ma
terials until 1t is certain where the
money is coming from.
The second reason is that San Fran
cisco will soon put sS,000.000 of public
per cent and will sell them to east
ern brokers. The extra half per cent
at which the San Francisco bonds are
offered will make a difference In in
terest that bond buyers will not likely
overlook.
A. A. Hubbard of the board of pub
lie works stated yesterday that while
the extra half per cent on the Owens
river issue will make difference In
interest of about 50, 900 for the en-
tire forty years which the bonds have
to run, it is practically certain that
more than that amount can be saved
by the knowledge that the money will
certainly be forthcoming. He declares
they have found it to be the case In
letting contracts for city improvement
work that they could make much bet
ter bargains when the contractors were
certain they could get their money as
soon as the goods were delivered than
in cases where payment was post
poned to some indefinite time.