Los Angeles herald., 1910-09-03
SUE To PREVENT
POWER BOND SALE
Percy Clark and Others Question
Rights of City in EIec-
tric Transaction
PROJECT MAY BE DELAYED
Purpose of Action Declared to Be
Merely for Determining
Legal Rights

To prevent the issuance of bonds for
the development of electricity in con-
nection with the Owens river aque-
duct, an injunction suit against all city
officials connected with the project
was filed in the superior court yester-
Gay by Percy H. Clark, president of
the Percy H. Clark company, dealers
in real estate, member of the cham
Der Of commerce and of the Los An
gees realty board, and others.
The action is directed in general
against the city of Los Angeles and in
particular against Mayor Alexander
the members of the city council Harry
j. Lelande, city clerk, and c. H. Hanee,
city treasurer. It is desired that they
be enjoined from signing, countersign-
ing, selling or in any way performing
an act which would aid the issuance
OF the bonds.
The council last fall adopted a reso-
luton favoring the issuance of 3d.
100000 in bonds to develop electric
power from the aqueduct, and the vot-
ers of Los Angeles, at an election held
April 10, decided in favor of the plan
when, out of total of 14,041 ballots
cast, 12,672, or much more than two
thirds of the necessary majority, were
for it.
AS the result of the election the
council last Wednesday passed an or
dinance calling for the issuance Of the
bonds, the measure receiving its due
official publication Thursday, and the
speedy consumption of the acts by
which the funds for development Of
power would be obtained was eN-
pected.
QUESTIONS RIGHT OF CITY
In the suit for a restraining order
instituted by Clark the validity and ne
gotiability of the bonds, the right of
the city to issue them, the legality of
the city's entering into competition
with private corporations, the lawful
ness of a municipality selling electric
ity outside of its corporate limits, and
the city's limit of Indebtedness are at
tackled.
Mr.. Clark declares that he has in
stituted the suit only through public
spiritedness, as he wants, to know the
city is right before it goes ahead on
such a plan, and he has doubts about
the legality of such procedure.
''I believe it is not only my right,
but my duty" said Mr.. Clark, "both
as a taxpayer and a citizen to ascer-
tain if the city has not overstepped its
authority in planning to issue the
bonds. I have lived in Los Angeles
twenty years and expect to make it
my home for the remainder Of my life,
and l want to know that all of its acts
are valid.
'I know that aspersions will be cast
upon my motives in bringing the suit,
but I assure you that I have no ul-
terror impulses il the matter. I have
no stock and am not interested in any
power or light company though I have
had close business relations with w.
G. Kerckhoff.
MAY DELAY BOND ISSUE
"As a matter of fact, there was only
one man, beside my attorneys, with
whom I discussed the matter before
/ decided to file the suit. He is
great personal f end of mine and do
not care to give his name.
1.-THE question of the legality of the
city's contemplated action was called
to my attention by J. G. Scarborough
of Scarborough e. Bowen, my attor-
neys in the present suit and my legal
representatives for years.
after talking the matter over with
Mr.. Scarborough and considering 1t at
length, I told him to go ahead and
file the suit. I suppose there is
possibility of its tying the bond Issue
up in court for Il while. but Is 1t not
better to be right before going ahead?
Personally, I consider it too import
ant matter to be the subject of hasty
action
Mr.. Scarborough confirms Mr.. Clarks
assertions that the only reason for the
suit being instituted is the desire of
citizen and a taxpayer to know that
the city is acting legally.
'"The purpose of the action" said
Mr.. Scarborough. "is to determine the
validity and negotiability of the $3,-
100000 bonds which the city wants to
issue.
1.-THE questions involved are numer-
Gus. One is the power of the city to
issue any bonds now, and particularly
f1,v,
tion of electric power to be sold in
competition with the power companies
that is, the private corporations-al-
ready established ii its limits under
the rights granted 10 them by the con-
stitution of the state of California.
"Secion 10, article II, of the consti-
tuition gives private institutions the
right to establish their businesses in
cities where no public works are owned
or controlled by the municipalities.
Therefore, the right OF Los Angeles,
as a municipality, to construct mu-
nicipal light and power plant after
others have done so Is questionable.
CTTY's RIGHT FOR POWER
Another question which the action
will answer is the right of the city to
generate electricity for light, heat and
power and sell it outside Of it's cor
porate limits.
1.-THE limit of indebtedness for Los
Angeles, as fixed by it's charter, is
$5,000,O00, but the issuance Of $780, 900
bonds for the power project and those
for $3,O0O,OOO voted upon favorably at
the same time to construct wharVes
and docks at San Pedro and Whining
ton will make the municipalities in
debtedness $6, 500 900, or $1,5O0,00O more
than is legal.
"This $5000,00O limitation upon in
debtedness does not include bonds for
water works, and there is in the char
ter adopted last year a provision which
is supposed to exclude from it the
bonds which it is desired to be issued
for the docks anC wharves.
"These proceedings will attack that
provision"
Both Mr.. Scarborough and Mr. Clark
stated that they have in preparation
and expect to file early next week a
suit along similar lines attacking the
validity of the proposed bond issue of
s3,0OO0O0 for the purpose Of construct
ing the harbor docks and wharves.
John w. Shenk, city attorney. de-
clares that he las been expecting a
suit to settle the validity of the pro-
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