Capital journal. (Salem, Or.) 1919-1980, 1921-02-15
Irrigation Bond
BuyersDefended
By Scllneelock

Dy OCIuleelOCk
Denying the accusations made
by representatives Gallagher anC
Burdick on the floor of the nous,
in support of the irrigation bills
last week, declaring that Oregon
must have outside capital for the
development of it's irrigation pro
jects, Ralph H. Schneelock, Of the
Ralph II. Schneeloch Co, offers a
defense for the irrigation bond buy
ers and contractors in the follow
ing letter printed in the oregon
Journal:
Portland, Or, Feb. 14.-To the
Editor of the Journal-This state
ment is made in order that the
progress which irrigation develop
ment has enjoyed in the state OF
Oregon may not be interrupted as
a result of the speeches made Fri
day on the floor of the house, at
Salem, by Representatives Burdicil
and Gallagher, in connection with
the so-called irrigation bills"
The statements made by them
were absolutely false and 'mislead-
ing.
Every question on which a state
ment was made on the floor Friday
had been so clearly gone into and
disproved at the public hearing on
the bills Tuesday evening that no
man of ordinary intelligence, which
| regard Messrs. Burdick and Gal
lagher to have, could have misun-
derstood them.
Outside Money "Nccded."
Oregon cannot absorb all the
bonds ii originates; and, as funds
must come from outside the state.
syndicates of different bond deal
ers have been organized to under
write the several issues, and | hope
that this attack will not stop an
effort which has already brought
into the state for this irrigation de-
over $3.5OO,OOO of out
side capital.
The fact that bonds are bought
at 90 cents does not indicate a pro-
fit of 10 points, or that the selling
district is losing 10 per cent. It
proves that for some reason lin
ponds shall not bear over per
,ent) they bear a rate lower than
hey can be sold for at par on the |
market and therefore, must be dis
counted. This is easily understood |
when the bonds of the principal |
oreign governments have sold |
the same period to yield as
ligh as II per cent, and when Uni
ed states government bonds are
selling to Weld over 6 per cent.
Proof Not Made.
The mere fact that bond during
my three year period is once offer
ID at par does not prove the sale of
my number at that price. 1t is a
act that irrigation district bonds,
ONE of which were originally Of
cred. at par, have been subsequent
y retailed as low as 92.
No contractor works except for
n expected profit. The fact that a
contract Is let at cost, plus Is per
ent, with a limited figure to which
his Is per cent applies, does not
mean that the district losses this J &
Yer cent, or pays 1t in addition to
my other profit which the cmtrac-
or gets, but the / per cent is, in
tead of usual 25 to 35 per cent
hat any contractor adds to his eS-
imates of cost of 4. labor and ma
erial and equipment when figur-
ng a piece of work on a unit price
'asis or at a lump sum figure.
On this basis a unit price OF
imp sum contract would have cost
he'd istricts the cost of labor, ma
erial and equipment plus 25 to 35
er cent instead of plus | 8 pee cent
S paid in the cost plus contracts.
No district whose bonds have
cen sold to syndicate, which it
as been by duty to manage, has
uttered the loss of one penny by
raft, extortion, or improper or eX-
essive profit.
This would have been easily
roVed, even to the satisfaction of ,
Iessrs. Rurdick and Gallagher, 1
ad their real interest actually ,
cen the protection of the districts ,
nd the farmers. ,
Motives Are seen"
The motives for the introduction
f these bills. and the interests be-
ind them, were fully exposed at
ne public hearing Tuesday even
lg. This drove Messrs. Burdicll
nd Gallagher to practically aban- ,
on on Friday their attack of Mr.. ,
upper.
or the total membership of the :.
ouse of representatives, not a sin
le voice was raised in defense of
he bills excepting those of Messrs.
urdick and Gallagher. Their re- 6
larks, made when they were pro- [
'cted by the privilege of the house I
nd which could not be answered +
= those whom they charged with 8
improper practices, as a result of s
tuesdays hearing were not expect i
to have any effect upon the / i
.embers of the house. to whom
ley We're ostensibly addressed.
1t We're made as smoke screen c
deceive the public and TO be- 0
oud the issue to their misrepre-
nted constituents, who were prac- a
cally as one against the bills C
RALPH II. SCHNEELoCH. v
Ralph III Schneelock COMPANY. =
Eat PruneS