Los Angeles herald., 1910-06-21
CITY WILL HURRY
BOND PURCHASERS
Council Notifies New York Brok-
ers They Will Be Required
to Keep Contract
NOTICE SENT BY TELEGRAPH
Informed That $4,000 Will Be
Due from Them on
July 81
NOTICE SENT BY TELEGRAPH

Aggressive action was taken by the
city council yesterday in an effort to
get more money for the continuance of
work on the owens river aqueduct.
Kountze Bros. and A. B. Leach S5 Co.,
the New York firms holding the unsold
portion of tn aqueduct bonds, were
notified by wire that they would be re-
quired to pay to the city $S16,OO0 on
July 81, representing the regular BIZ
monthly payment on account OF their
bond deal with the city.
Already the city has received $3,200,-
900 more from the sale of aqueduct
bonds than the syndicate was required
to pay under it's contract. Recently,
when the bond market became de-
pressed, the syndicate insisted on
charging the excess sums paid to date
against the regular bi-monthly pay
ments. This would have the effect of
relieving the syndicate from further
payments on account for some time,
and by depriving the aqueduct commits
sion of the large sums of cash needed
greatly curtailing the progress of the
aqueduct.
SPECIAL SESSION
After the council, in special session,
had decided to serve notice on the syn
dicate that it would be required to
make the usual bi-monthly payment
July 81 the clerk of the council notified
| the syndicate by telegraph of the &C
tion taken in order that there might
be no question of the syndicate receiv-
ing the forty days advance notice
necessary under the terms of its con-
tract with the city.
City Attorney Hewitt denied yester-
day that the city would sue, II neces-
sary, to enforce the provisions of the
contract. He said that the action was
Il Aofn in
event of a suit later. However, the
builders of the aqueduct are anxious
to continue the rapid progress made
thus far and the syndicate will be
pressed for payment on the date
stated. -
The resolution adopted follows:
Be it resolved and determined
by the council of the city of Los
Angeles, that Kountze Bros. and
A. b. Leach & Co. of the city of
New York be and they are hereby
notified sand required to take and
purchase on the 31st day of July,
1910, $4,000 bonds of the S4,S96,000
bonds of the said city, the right and
option to take and purchase which,
in installments of $4,000 each, be-
ginning on February 1, 1910, and
every sixty days thereafter, was
given said Kountze Bros. and A. B.
Leach & Co. in the contract be-
tween them and the city of Los An
geles under date of July 10, 1906;
the proceeds of the sale of said
$4,000 of said bonds on the S1st
day of July, 1910, being required,
and are hereby declared to be SO
required, by the said city.
Be it further resolved and deter
mined, that the city clerk be and he
is hereby directed and instructed
to forthwith serve notice of this
resolution upon said Kountze Bros.
and A. B. Leach & Co. by sending
and transmitting by telegraph a
COPY of this resolution to said
Kountze Bros. and A. B. Leach &
WHAT HEWITT SAYS
''This is a declaration of the city's
policy toward the syndicate handling
the bonds" said City Attorney Hew-
lit. 1t is a precaution taken to pre-
vent an estoppel arising in event of
suit at a later date to compel the
bond syndicate to live up to their con-
tract.
These syndicates purchased $4,000
900 of aqueduct bonds, and took an
option to cover the balance of the is
sue The payments they were to make
are bi-monthly and amount to $685.
OOO Last summer the city officials
took up the matter of the syndicates
purchasing bonds faster than the
agreement called for in order that the
work should be completed sooner
The bond dealers took $2,O00,00O more
than the usual monthly installment
last September, and in February OF
this year took 81, 100000, and at a sub
seuuent date took $4,000 more than
the usual purchase.
1.-THE syndicates think that these ex-
ira bond purchases apply on the BIZ
monthly payments, and that the pay
ments may cease until such time as
the amount they expended in extra
bond purchases can be made up by al
lowing payments to be held up.
we are notifying them that their BIZ
monthly payment of $4,000 is due on
July 81. We are establishing our at
titude toward them so that in event
of a suit no estoepel will be invoked
against the CITY,"