Los Angeles herald., 1910-07-14

important
gees at the present time is the completion OF the aque
duct and the coming possession of the city OF the
large income from the sale of surplus water and power which
the aqueduct will bring with it.
The Herald has been making very careful nvestga-
tons into the condition of the aqueduct finances and
the result these investigations We propose lay before
readers in order that the ctzeny be fully advised Of the
situation.
The people of the city Los Angeles voted to issue $2
100000 of 4% bonds for constructing the aqueduct Shortly
after they for 03600 Of them sold
the state board of examiners and other parties.
By agreement made by the city of Los Angeles the
part and the bondbuyng houses of Kounze Bros and A B.
Leach Co. of New York the other part bearing date the
10th day july 9O8 following provision made for
the disposition of the $2 9664O0 of the bonds remaining
sold These two bondbuyn houses purchased outright $
080OO0 of the bonds the price of par and of 10 premium
with the provision that these bonds all to be taken by
the buyers by June 10Y with the right to take them all at
issue the buyers took options follows:
An option purchase $2,856OOo par and of go
premium $408O00 be taken June l. 1902 and the
mandr be taken three nsaments of $4,000 each be-
ginning with June 1902 ending December 1902 with
the provision that they might all be taken by the buyers any
time after February l, 1909
option to purchase 100000 par and of % prem
um $4,000 be taken February 1910 and the balance
be taken in four equal nstaments of $4,000 each sixty
days thereafter and all be taken by December 1910 with
the provision that the buyers could take all time after
February l. 1910
An option to purchase s40o6ooO par and of % prem
um $4,000 be taken by February l. 1911, and the
mander in equal insamens every sixty days thereafter all
be taken by December 191 with the provision that the
purchasers
An option purchase the remainder of the issue being
$523840o of bonds at the price OF par and lS premium
$4,000 of be taken February 1872 and like
every sixty days thereafter until the whole
taken provided that all might be taken at any time after Feb
ruary l. 1912
When the contract sale of the bonds originally
the provisions the amounts to be taken each
were based upon estimates as to the probable progress OF the
work and the consequent need OF money ior paying lot G
Until the of 1902 the bond buyers continued
to take and pay for the bonds IN wt he OF
their contract with the city By that time the board OF public
had asceraned that the work the aqueduc could
be much expedited they could secure money to pay 9
the faster than provided in the contract Tor the sale
the bonds This fact together with the benefit which the
city from the aqueduct being completed by May
l. 1912 in place of May l. 1913, originally planned was
represented to the bond buyers
The bond buyers agreed would be of advantage
the city expedite the aqueduct construction rapidly
original plans called for and that this might be done
agreed increase their taking of bonds beyond the
specified by the contract
Carrying this agreement in September 1909 the bond
BUYERS of bonds of the amount that
they obligated by the terms Of their contract to take dur
ing year 1909 On February they took $O2OO00 and on
Last spring when the matter of voting the s. 100000 bond
issue for the power works the aqueduct before
people of the city, the bond buyers communicated with the
city officials and objected to the people voting these bonds on
ground that the issuing of them by the city before the
aqueduct bonds all disposed of might interfere with the
sale of the latter They reminded OF the fact that the de
veopmen electricity the aqueduct of the
gna aqeduct plan with which they had been made acquan
ed when they contracted for the purchase OF the aqueduct
bonds shown that the bonds which the city proposed
issue still well within its legal Limitation OF bonded
Indebtedness
point the 86O0 of bonds taken September 1902 in
excess their obligations for that year. and the $1530O0O
taken in February and April 1910 all to apply their
1910 obligations under the contract thus leaving according
their contention only $4,000 of the 1910 batch of bonds
taken
The Herald is informed and believes correctly that the
had arranged with large bOndbuyng customer
to take SOOO00 of the ciy bonds price satisfactory
the BUYERS which would have furnished the bond buyers with
that much money pay the city Just before
tract for the sale of million dollars should
have the city council reduced
for domestic lighting in the city to cents in place of the g.
cent which had previously prevailed Immediately after
the bond buyers to have failed refused
to close the the sale of the half million
bonds which practically arranged They informed
the city that they would take any bonds until De-
cember when under the terms of their contract they
strued compelled to take the $4,000 remaining
of the batch taken in 1909 The city claims appar
emily much justice that the bond buyers by agreeing to
the proposition city take the bonds rapidly than
was provided their the end that the city might
working force and complete the aquedu
earlier than originally planned had changed the terms OF their
purchase of the bonds from the city Certain
1y the of the bond buyers had resulted in the city
tending its working force to very considerable extent and
going large expense which would have to had
the bond buyers agreed the made in the summer
of 1909 increase their taking of bonds that the aqueduct
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