Los Angeles herald., 1908-07-09

DROMGOLD AND
WALLACE CLASH
CHARGES THAT COMMISSION
WAS PAID
soLoNs QUARREL OVER OWENS
RIVER ISSUE
Bids for over Two Million Dollars
Worth May Be Snapped Up
Eagerly at Today's a.
Session

After a heated session of the city
council in which Councilman Dromgold
Of the First ward directly and openly
accused Councilman Wallace of the
Fifth ward of a personal and financial
interest in his vigorous efforts to put
through the council a proposal to pur-
chase Owen river bonds, made by two
local concerns, the market for aque-
duct securities took a sudden upward
turn yesterday afternoon. 1t showed
a disposition to go still higher If al
lowed over night to adjust Itself.
The market was given until o'clock
this afternoon to settle, and at that
time, in all probability. several bond
buying. firms will make bids for the
securities.
This statement by w. B. Mathews.
aqueduct attorney-"Give me until
noon tomorrow and / will sell this
$2,0 900 of bonds at AZ per cent with
out a single string in the way of op-
tions attached to it"--was the chief
factor In the upward tendency OF the
market.
At 1 o'clock today the council Will
meet again in an effort to secure money
for the debt burdened aqueduct.
That this effort Will be successful
and much better proposals submitted
than have been made so far is evident
local and New York bond buyers dis
played at the meeting of the council
yesterday The only difficulty to be
feared is that these various representa-
tives may get together before the meet
Ing today and reach a gentlemen.s
played yesterday, however, this is bui
q remote possibility
Exciting Session
Yesterdays session Of the council was
one of the most exciting since the his
toric attempt OF the previous council
TO dispose OF the river bed franchise
without taking the public into its con-
fidence.
1t was a continuous circus yesterday
The council first met at 10 o'clock and
Immediately adjourned to the mayors
office for an executive conference. At
this conference ]. c. Drake OF the Los
Angeles Trust company and ]. II. Ad-
ans of Adams-Phillips company were
| present. About noon the council re-
| turned to its own chambers and almost
| Immediately took a recess until Q
O'Clock. On convening at 2 o'clock an
other executive session was held in the
mayors ONCE, at which Messrs. Drake
and Adams were present.
| When the council finally returned to
the council chamber, about 4 O'Clock, It
| was with an air that presaged some
| NO~-S -~--N-
1 there.
r. w. DromgoId OF the First ward
started the circus by taking up the
business where It had been left Off by
the council at the previous days ses..
sion. the consideration OF the proposal
OF A. B. Leach & Co. and Kountze
Brothers to take the entire issue Of
bonds on a series of options to begin
with the immediate purchase OF S2,-
100000 This is the. proposition that
has kept the council broiling for the
last ten days.
Offer Not withdrawn
At the meeting Tuesday ]. w. Bull
lard, coast representative Of the New
York bankers had told the council he
could not hold the offer open any long
or but would withdraw 1t at 8 o'clock
Tuesday night. Yesterday he was ad-
vised- by the city attorney that the pro-
posal submitted, In the hands of the
council and duly signed by the bank
ers, could not be withdrawn, as time
was not OF the essence of the contract.
The council, therefore, although dis
pleased at what they considered Bal
lard's threat, found the matter before
them whether or not they liked 1t. The
provision for the options in this con-
tract was the chief sticking point for
the council.
While they were discussing this
phase Of the contract Aqueduct Attor-
fley w. B. Mathews, who had negoti-
ated the deal with the New York
bankers, made statement that started
furious discussion and acrimonious
repartee between Councilmen Drom-
gold and Wallace.
'While / was In New York carrying
on this deal for the bonds at ~ per
cent, and with the positive assurance
of the councilmen that they would
never consent TO any proposal looking
4 ....k1 lnoa. <.Qk HAn ntnf-
ems river bonds, transactions We're go
ing on in Los Angeles whereby men,
bers Of the council had reached gen.
tlemen's agreement to give local buyers
options on further issues. When this
news reached the New York bankers
and 1t reached them as soon as the plan
as formulated in Los Angeles could pc
flashed over the wires, there was MOTH
ing for me to do but make the best
terms could on options could have
sold the s., 2,040,000 worth of bonds at IA
per cent interest without a single string
attached to It, and can do it right In
this city If the council will give me un-
til noon tomorrow"
Mr.. Mathews positive statement, and
Mr. Mathews has the reputation Tor
not making positive statements unless
he knows whereof he speaks, that ne
could sell the bonds by noon today
without strings tied TO IL brought
Councilman Dromgold to his feet In an
instant with a motion that Mr..
Mathews be given such time.
Immediately Councilman Wallace
moved as a substitute that the PROPOSE
tion of Adams, Phillips & Co. and the
Los Angeles Trust company be ac-
cepted.
These corporations combined agreed
to take up the issue OF $2,040.OO0 at 4h
per cent and asked an option on sS.Oo0,-
900 more Of the bonds. the option to run
for sixty days. This was the proposal
submitted in the executive conferences
and which a sufficient number of the
councilmen had been pledged to sup
port.
Wallace Makes Strong Plea
Wallace pleaded eloquently for the
acceptance of this proposal. He
pointed out the option asked was for
but ss.0oO.OOO. whereas the New York |
bankers had asked for options on
practically $40, ,OO0, ,OOO He also pointed |
out the option asked by the local firms |
would expire in sixty days, whereas