Los Angeles herald., 1910-07-17

The threatened crisis in the Los An
Geles aqueduct situation aVerted, the
uncertainty attaching to it was en-
tirely dispelled last night when it waa
announced, semi-officially, by one of
the city councimen who has taken an
active part in engineering the bond
problem, that the banks of Los Angeles
will not be called on to provide money
for the owens river aqueduct, although
these banks have generously agreed tc
purchase enough of the bonds, if neces-
sary, to keep the project going as the
city planned.
The bankers of Los Angeles con-
sented to provide the money with a
Willingness and rapidity that were re-
garded as remarkable even in Wall
street, because, it was said, the aque-
duct bonds would not yield az high
a rate of interest as the local capital
lists could secure from other forms of
investment: but their loyalty to the
city ano their generous response to the
appeals of. the aqueduct management
not only demonstrated the city's ample
ability to finance it's own great pro-
jects. but undoubtedly eXerted a tre-
mendous influence in New York and
caused the bond syndicate to recede
from its position. Since it's first re-
fusal to make further payments under
the contract, on the plea that it has
has waived its option and agreed to
purchase S43O,O00 of the bondsfoutright,
whereas, by the terms of its option
the payment on the December install
ment would have amounted only to
$4,000.
S1,OOO,OOO SOLD
The city has agreed to accept the
offer of the New York Life and Metro
politan Insurance companies to pur-
nf
bonds, if those companies will consent
to certain slight amendments to their
proposition, which undoubtedly they
will, and this means that Los Angeles
will receive at least $1,5S0,000 from New
York, with prospects of securing fully
$2,000,000 from that source alone with
in the next week or ten days
In addition to the amount now prac-
tically available from New York. there
is an aqueduct balance and a present
and fall sinking fund which amounts
altogether to $6S5,000. plus the $780,
600 which will be received from the
Merchants Bank and Trust company of
Los Angeles for the "Series H. issue
and will bring the present total up to
$2,315000. 1t is the consensus of opin-
ion however, so far as could be ascer-
tanned by numerous inquiries yester
day, that the aqueduct work should be
continued at the maximum speed in
order to complete the project in 1912,
and the maximum plan calls for the
expenditure of at least 100000 a month,
according to the aqueduct officials,
and the present available fund of 81,
315, 900 will not permit of the maximum
progress.
Administrative officials and others
are reticent to discuss the present sit
uation. but intimated yesterday that
they are not disposed to insist on the
local banks purchasing the bonds when
il is quite evident there will be no
difficulty in raising the money in the
east; so this is taken to mean that
an effort will be made to provide all
the capital necessary from the sale of
bonds outside of Los Angeles. This
desire, it is said, Is not due to any
reluctance on the part of Los Angeles
financiers to subscribe for the bonds,
hut merely to a public desire to keep
all of the surplus cash available for
future enterprises ION tap" in Los
Angeles, hence to float the bonds in
other markets.
Regardless of the disposition of the
few little difficulties which still APP
pear to be involved in the project,
there is no reason to fear for the out
come. and the aqueduct work is prac-
tically certain to be resumed on the
maximum scale, for it is believed pub
lie sentiment favors this plan and that
IL the little money needed to make up
the maximum fund is not Forthcoming
from the east the Los Angeles banks
will be called on to provide the diff
ference, which difference amounting
approximately to $500,O00) they have
already agreed to furnish, if it is |
necessary.
The city so far has given no op-
tion on it's harbor and power bonds, |
and is free to invest its sinking fund, |
as 1t accumulates, according to the best
Judgment of the city officials.
Point by point the New York bond |
syndicate has reeeded from its posi-
ton. until now the people of Los An
geIes have scored in practically every |
contention which they made, and the
case is said to be almost without a |
parallel in the history Of the money |
markets of the east. =