Daily capital journal. (Salem, Oregon) 1903-1919, 1913-02-11
LETTER HAS NOTHING
TO Do WITH MATTER
Bond Buyer Wanting Legal
Opinion Has No Bearing
on City Salaries.
IS ARGUMENT AGAINST 1T
But The Journal Prints 1t Because
1t is the First and Only Attempt
at Reply.
IS ARGUMENT AGAINST 1T

Ed, Journal I notice your com.
ments in yesterdays issue in regard
to the matter of hiring an eastern law
firm to pass upon the validity Of oul
sewer bond ISSUE instead Of requiring
our city attorney to pass upon the
said bonds. In answer please allow
me to submit letter from firm
of bond purchasers Of Chicago, which
sets forth the very same arguments
that prevailed in the council when
the matter Of employing an attorney
for this purpose. This letter was moi
written at that time, and our argu.
ments we're based largely on common
understanding among western bond
holders. Now | think the letter should
be accepted by the general public as q
justification Of the action of the ooun-
Gil, and put to rest the criticism that
we have wasted the peoples money, In
not requiring our city attorney to rem
der decision.
Chicago, Jan. 28, 1913.
Mr. Rollin X. Page, City Attorney Sa.
lem, Oregon:
Dear Sir: We have heard indirect
1y that your city is considering the
sale Of in the neighborhood of $780,
900 sewer bonds, and that there is
some prospect of having these ap-
proved in advance by an attarney o.
standing. We hope very much that
they will decide to take this step, and
our reasons are these
In the first place the opinion OF
Wood & Oakley or Zane, Bushey &
Weber, Of Chicago; Caldwell, Masslich
6 Reed, of New York; or Storey,
ThOrndyke & Dodge, Of Boston, would
be entirely satisfactory to any one
bidding for the bonds. These attor-
neys in general way, rank equally
and their opinion would not alone be
acceptable to the purchasing house.
but to the customers Of the purchas-
ing house as well.
In the second place the city council
would know the minute the bonds
were sold that they would be taken up
promptly and the usual long delay in
having the bonds approved would be
done away with. AS 1t is now "a city
sells bonds subject to the opinion OF
the attorney for the purchasing house,
and they do not know for 60 days, and
sometimes longer, whether the sale
will ever be consummated, and conse-
quently whether they will get their
money. In granting the opinion in ad-
vance, this is all done away with
/ getting the bonds approved in ad-
vance a city would not be out anything
for the reason that when house sub
mits bid for bonds they always fig
ure in their bid the cost of the attor-
ney's opinion, ETC., and obviously If
this matter has already been taken
care Of just that much is added to
their bid. We think, without excep-
tion, that cities which have in the
past, and are now pursuing this plan,
think II is the most satisfactory one,
and we know of no city that has start
ed this that has not continued o do
so.
We wish to mention one other point
that is, the place Of payment Of prin-
cipal and interest, In general way
IL is an Eastern house that buys the
bonds Of the larger coast cities, and In
a great majority of cases the custom
.ers of such a house reside in the
East. These customers, consisting OF
private investors, banks and instltu-
tions, object strenuously to Western
payment because It means that In re.
mitting coupons they are out of the
use Of that money for a period of Q
week or more.
California went through this year,
ago when they had no law permitting
them to make the place of payment
outside of the state, and in most cases
they had to rely on home capital t
purchase their bonds. Eventually
however, they we're forced to secur,
legislation permitting them to max,
their bonds payable at some Eastern
point.
Again, the city does not lose any
thing by this change for a house viii
pay more for bonds when payment. o
principal and interest is at some East
ern monetary center, Your own rec
ords will show this, and we can refei
Won 10 the sale in November two year,