Imperial Valley press., 1922-07-18
MUTUALSv0TE
AGREEMENT

Alttr itll dll idN ScSSlOH WIN lNP
resentatives of the mutual water com
panies, late last evening the directors
of the Imperial Irrigation District en-
tered into Il deal with the First Secur-
tiles Co. of Los Angeles and the Anglo
London & Paris Co. of San Francisco
for the sale of 81 100000 of the new
issue of bonds with an option to pur-
chase an additional 81 $4,000 on a
basis of "a with a $3.50 split of ali
amounts received above par on the re-
sale
The figure agreed upon represented
the basis recommended by representa-
tives Of the mutual water companies
after frank discussion extending
throughout the entire afternoon. The
option is to expire on January |, 1923
and the deal leaves $4,000 900 in the
hands of the district not affected by
the present negotiations.
Nickerson States Views
When the meeting with directors of
the mutual water companies was called
together after the lunch hour, rresi
dent McPhcrrin said that as Mr.. Nick
erson had been one of those having al
intimate part III the negotiations he
thought that it would be of interest to
hear from him..
Mr.. Nickerson recalled past expert
ences which the irrigation district had
had with the banks represented III the
present negotiations, saving that all
tended to bear out the fact that the
banks did have real interest in the
valley and did wish the valley to sue
ceed He argued that the situation
hinged upon an understanding of the
market for valley securities and the
whole problem resolved itself into Il
question whether the people of the
valley were willing to put themselves
in the hands of this banking syndicate
Personally, he did not believe the water
companies could handle the bonds at
all and thought that this phase of the
discussion should be dismissed.
II. ID. Mccall suggested that the
proposition be amended to provide for
the sale of bonds at par on six per
cent basis and an agreement, if neces
sary, to pay the syndicate 61a95 for
marketing them.
Mr.. McPherrin said that this solu-
tiOn had suggested itself to the com
mittee, but objection had been found
10 it on the ground that it was doubt
full whether the directors had power to
do this legally without incurring per
sonal liability. The plan had not re-
ceivcd the O. X. of the district S legal
department.
Bond Law Faulty, Davis Says
George III. Davis said he had been in
touch with the situation from the be
ginning and is in full accord with the
PROJECT. 1t is difficult to understand,
he sad, why school district bonds can
be sold at par on n basis as low as
five percent and bonds of the irriga-
tion district, which includes all the
school districts, could not be sold on a
SIX percent basis He thought the an
swer is found in the statutory limita-
tiOn that school district bonds can not
be sold at less than par where the same
law IN effect with respect to the ir-
rigation districts a bid of par would
have been forthcoming, Mr.. Davis con
cluded, pointing out that more issues
would have to be floated in the future
and if sales on the basis of the present
proposition were to become established
as II precedent it would be difficult TO
make advantageous disposal of future
issues.
Mr.. Davis thought that segregatine
the issues would be disastrous and
should be dismissed. lie felt that the
situation of the district was now the
best that it had ever been and that this
fact would react favorably upon the
price of securities if it once became
generally understood.
HARRISON Suggestion Adopted
Mr.. Harrison replied for the svndi
cate and said that while the force OF
Mr.. Davis arguments could be con.
ceded, ii remained a fact that the
market for securities was determined
by the supply and the demand.
ID. +. HARRISON asked why it would
not be possible to extend the sale of
bonds for drainage over a period OF
two or three years as it would require
that time for the project to develop
The suggestion seemed to be favora bly
received and was later Incorporated in
the deal
President McPherrin, who exhibited
genius for winning the confidence OF
the water company representatives
present, took the floor again and out
lined the development of the proceed
ings up to the present hour. lie sale
that while he was more convinced every
day OF the wisdom and the funda