Los Angeles herald., 1910-11-23
Amended Contract to Get Funds
for Aqueduct Fails of the
Necessary Support
CITY PROPOSES NEW TERMS
O'Brien ManhandIes the Advisory
Committee, and Washburn
Gets Indignant

with the mayor when the vote on the
bond contract was called Yesterday af-
ternoon, and the amended contract was
lost. This leaves the matter as it was
before an attempt was made to amend
the contract with money enough to
carry the work of the aqueduct along
ON a basis of $250,000 month until past
the time for the bond syndicate to say
if 1t will exercise it's option FEBRUARY 1;
The five councilmen who voted
against the contract are Andrews, Bet
kouski, O'Brien. Whiffen and Will
liams. Gregory, Stewart, Washburn ana
Lusk voted in its favor.
In place of the syndicate proposing
terms to the city, the city Is now pro
posing terms to the syndicate, Tor I'M
mediately after the contract amend
ment was lost the council instructed
the finance committee, with the advis-
ory committee, to make proposal TO
the New York bond syndicate. The
proposition is for the city TO sell the
syndicate $1,020,000 of bonds to be USED
for Immediate construction work and
i 81. .259 900 to be used as needed for the
purchase of siphon steel These bonds
are to be taken from the last of the 1912
option, and do not interfere in any way
with the receipts of money from the
syndicate If the option is exercised on
February l.
w. j: Washburn received these In
structions with a smile. He said that
the finance committee had tried to in
duce the syndicate to accept some such
terms before the,amended contract was
presented, but could not make the deal,
and intimated that he did not consider
1t could be made now.
FOLLOW MAYORS SUGGESTION
rc, ..-., 4i.o co,noI v,ro1osaa rvera
introduced by Coun, ilnlan O'Brien, aid
are almost exactly those suggested in
the idea the mayor has promulgated.
All was not peace and harmony dur
ing the discussion Of the bond matter.
There were several riffs in the lutte all
during the day, but the biggest crack
appeared when Mr.. Washburn objected
to voting on the proposal to the syndi-
cate. as the council had taken the mat
ter out of the hands of the finance ana
advisory committee altogether. Mr..
Stewart adopted the same attitude, and
then President Lusk suggested that the
motion read that the finance and advls-
ory committee be requested to present
the matter to the syndicate.
Councilman O'Brien, who had made
the original motion, said he was willing
for the councils finance committee TO
act in the matter, but did not care to
include the advisory committee.
"I have lost faith in the advisory
committee" he said. II have never
considered an advisory committee nec-
essary, and If there is not enough
brains in this council to handle the
citys business we had better all be re-
called"
Mr.. Washburn took immediate ex-
ceptions to this remark. declaring 1t
was a direct slap at some estimabie
men who had given much of their time
20 he off X1sS infaraata and whose SER
vices had been valuable. He practic-
ally declined to act in the matter unless
the advisory committee was included
After a little more argument O'Brien
agreed to include the advisory commit
ATTORNEY GIVES OPINION
During the morning session resolu-
tions adopted by the chamber of COM
merce and the Los Angeles realty board
were read to the council. These resolu-
tions urged the council to adopt the
contract advocated by the finance COM
mittee, but they seemed to have little
effect; for the councilmen went to
their seats yesterday morning, deter.
mined on what they intended to do, and
they did it. The lineup was apparent
from the moment the first word on the
bond matter was spoken.
During the discussion Councilman
Andrews asked City Attorney Shenk If
the tying up of the sinking fund as
proposed in the amended contract was
legal. Mr.. Shenk replied that he mad
had some doubts of 1t, as the sinking
fund was in no. way connected with
the sale of the bonds. and that the
syndicate had no more reason to ask
that the sinking fund to retire the
bonds be tied up when an option was
taken ON the securities than 1t had II
it took an option on Elysian park. He
said that Dillon, Clay & Thompson, the
New York bond lawyers who passed
on all the city's securities, had said
that it was legal, but a question of
policy for the city to decide. In reply
to a direct question from President
Lusk rs to his personal opinion on the
matter, Mr.. Shenk intimated that he
did not consider 1t legal to tie up the
sinking fund in such a way.
While the finance committee was not
able to get more favorable terms from
the syndicate than those included in
the proposed amended contract, the
mayor and majority of the council are
OF the opinion that the. syndicate may
be inclined to consider the city's pros
posal now, as the council has definitely
turned down the one made by the syn
dicate.
The proposal m1de by the city is
largely to the advantage of the syndi-
cate. In return for the ready money
the bonds will bring the council offers
to sell the entire $2,27S,00O at par from
the last option, while under the present
contract with the syndicate, If the OPP
tion is exercised, 1t would have to pay
/ per cent premium on these very bonds
1t can now buy at par.
A--s-s-o-
WANTS RECEIVER APPOINTED