"State's Move Next in Long Fight for Drainage Bonds; Wants Injunction Removed" - Jul. 16, 1928 newspaper article discuss...

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Title:
"State's Move Next in Long Fight for Drainage Bonds; Wants Injunction Removed" - Jul. 16, 1928 newspaper article discussing the state drainage board's preparations to use bonds to finance further draining of the Everglades
Series Title:
Business Records of Sydney Octavius Chase
Physical Description:
Unknown
Language:
English
Publication Date:
Physical Location:
Box: 22
Folder: 5.68. Everglades Drainage (Bill Number 479)

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Spatial Coverage:
North America -- United States of America -- Florida

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Source Institution:
University of Florida
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All applicable rights reserved by the source institution and holding location.
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AA00007668:00001


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TAMPA MORNING TRIBUNE, MONDAY, JULY 16, 1928


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State's Move Next in Long


Fight for Drainage Bonds;


Wants Injunction Removed

TALLAHASSEE, July 15.--(Associ- legislature giving approval to It, began
ated Press.)-The state drainage to center their efforts on the courts
board is preparing to make an effort to defeat the plan. .They fled in the
to dissolve the temporary injunction circuit court for Leon county a pe-
granted at Pensacola by Federal Judge tltion to enjoin the board from carry-
Henry D. Clayton in the now famous Ing out the provisions of the legis-
Everglades financing case. lative acts, alleging that they were!
The case was the outgrowth of ef- I unconstitutional. Judge E. C. Love, at
rurs .on the part. o the board to put Quincy, finally granted a temporary
into operation the plan of Governor injunction and an appeal from his
Martin for disposing of bonds of the order was promptly taken to the su-
Everglades district with which it was i preme court. The unanimous decision
hoped to make immediately available upholding the constitutionality of the
$10,000.000 to finance further Ever- acts, and reversing Judge Love fol-
glades drainage operations, and to lowed.
help in paying off an existing indebt- Delivery Started
edness over the area, and another The decision of the supreme court
$10,000,000, If needed, to complete the was the signal for the board to pro-
work. wis the signal for the board to pro-
wok. ceed with delivery of the bonds. While
Judge Olayton's decision followed the opposition continued to petition
injunction proceedings instituted by various courts in efforts to stem the
Spitzer-Rorick and Company, a Toledo tide, steps preliminary to actual plac-
bond firm. which claimed t had a ing the bonds in the hands of the
priority in the matter of taking over ing be b s n t he bond
Everglades district bonds, and that new buyers were a ten. T
disposal of the bonds in the Martin firms ratified their intention to take
plan to two bond firms of New York the bonds, and all members of the
would be violative of an alleged con- 'board signed a contract with them"
ract held by the Toledo concern with ensuring delivery of the bonds.
he board. The effect of the injunc- During the beat of the Democratic
ion was to block the board's efforts primary campaign, Governor Martin.
to deliver the new bonds. State Treasurer John C. Luning and
Mayo Refused to Sign Attorney General Fred H. Davis, all
Just prior to issuance of the njun- members of the drainage board, met
ion, Commissioner of riculure at Tampa, conferred with an attorney
ion, Commissioner of Agriculture for the bond firms and announced
fathan Mayo, a member of the board, that a transfer of the bonds was in
refused to sign the new bonds, fore tht a transfer of the bonds was
talking efforts of the other board order. Ten million dollars worth of
members to dispose of the Issue. Mr temporary bonds had been signed by
*4ayo gave pending litigation against all members of the board, and were to
he issue as his reason for not sign- I be held as a sort of binder, to be re-
ng. placed by the permanent bonds as
The announcement that the board soon as the latter were signed and de-
!as preparing to attempt to dissolve livered to the firms.
he injunction was made by Attorney Opposition Shown
general Fred H. Davis. In the mean- A shdrt thme later, the board receiv-
me, Mr. Davis said, Judge Clayton ed notice that Spitzer-Rorick and
as fixed $50,000 as the amount of Company was active to prevent the
he bond to be required of the com- new issue. A series of conferences,
lainants if an appeal is taken. was held between officials of that firm
Judge Clayton gave the board until and members of the board, with the
ug. 6 to reply in the proceedings result that no agreement was effected.
before theinjunctlon 14 made per- because of the existing new contract
anent.
nien't. with the two New York bond firms,
Incidents in connection with further andth the two New York bond firms,no-
nancing of Everglades drainage work and thet thle would contest the new
ave occurred in rapid succession. tice th0t they would contest the new
ere is a brief review of the situation issue.
om its inception. The information Then began a race between the
supplied by the records and by board and the Toledo firm, the former
embers of the drainage board, to deliver the bonds to avoid an in-
Pledges Reclamation junction, and the latter to enjoin the
SM i h r f board before the delivery was carried
Governor Martin, in his race for out. The governor, Mr. Luning and
vernor, pledged himself to continue J. Stuart Lewis, secretary of the board,
ae reclamat on wfk in the Ever- went to New York, where they signed
ades, f he could find some way to the bonds. Attorney General Davis
ance it. When he assumed office could not join them right at that time
1925, a heavy indebtedness was on to affix his signature, and Comptrol-
e district, and a market for Ever- ler Ernest Amos and Commissioner of
ades bonds could not be found. Agriculture Mayo could not go at all,
the latter advised the board that he
would not sign any bonds outside the
state.
Not to be outdone, and desiring to:
carry out their contract with the bond 1
dealers, the governor and Mr. Ltning
suggested that the bonds be sent as
speedily as possible t. Tallahassee,
uara-b, h arl. .,,t..hnsDa.haBlf algna
Stores could -be obtained quickly. The,
bond firms dispatched the bonds by
airplane to Atlanta, and they were
sent from the latter place by train,
arriving, here almost as soon as the
governor and treasurer.


Certain Dade county interests,
i which had bitterly fought the gov-
Sernor's Angram almost from the be-
ginning, including the bills in the


In 1926, the governor called a meet-
ing of Everglades business interests,
and others concerned In continuing
the- reclamation work, to devise some
way of further financing the opera-
tions. After a gathering at West
Palm Beach, a group of business men,
appointed at that meeting to consider
some prgram- of. financing, met in
TaiKlghasgeer bn&w al n au-cnay u3p-
slon, adopted a resolution recommend-
ing an extension of the district, to
take in new territory for taxation, the
levying of a one-mill state-wide tax
to help in financing the work, and
the 'creation of an agency in the dis-
Strict to co-operate with the state
board in reclamation operations A
survey also was requested to determine
what had been done, and what might
be expected with future drainage
work. The survey was subsequently
carried out by a corps of prominent
engineers.
Bond Sale Approved
Governor Martin, sometime later,
announced to members of the board
at one of their weekly meetings that
he believed that he could finance the
Everglades work. 11 they would give
him permission to handle it. The
proposal was promptly granted. The
governor, through his connection with
certain big business interests of Flor-
ida, obtained a market for new Ever-
glades bonds, with a large New York
bond house, Eldredge and Company,
as the prospective acceptor.
It was here that S. Davies Warfield,
late president of the Seaboard Air
Line Railway, which was vitally in-
terested in continuing Everglades
drainage operations, gave what the
board regarded as invaluable assist-
ance to the governor in marketing the
bonds, and Dillon Read and Company,
another New York bond firm, was
finally made co-partner-with Eldredge
and Company in handling the pro-
posed issue.
The agreement of the bond firms to
take the issue was predicated upon
the consent of the governor and the
board to sponsor certain legislation
providing for the issue, and a subse-
quent decision of the Florida supreme
court regarding the legality of the
act. The legislation was adopted
overwhelmingly by the 1927 legisla-
ture, and the state supreme court, by
a unanimous decision, held it valid.
Revenue for Debts
The legislation provided for the
application of certain revenue derived
by state boards from lands in the
district and the levying of an ad
valorem tax, amounting to about a
fifth of a mill. to paying off the new
and former indebtedness of the area.
Governor Martin eventually an-
nounced the sale of the bonds. Pro-
tests were heard from some sources.
The objectors charged the governor
and the board with undue secrecy in
effecting the sale, ambiguity in an-
nouncing the sale price, and a breach
of governmental procedure in fall-
ing to call for bids for the new issue.
The board officials had announced
that the price obtained for the bonds'
was the best ever produced, and gave
the interest basis of the bonds as the
terms agreed upon.










Beod Issue Enjoined
Meantme, the board officials and
bond dealers were served with formal
notice that Spltzer-Roriok and Com-
pany had petitioned the federal court
at Pensacola to enjoin the bond issue.
The race had now resolved itself Into
one between the board and the fed-
eral court.
Mr. Amos finally signed enough of
the bonds to let the board know of his
willingness to carry out the contract,
but Mr. Mayo could not be reached.
It was learned that he would not
return to his office here for two or
three weeks. The other members of
the board knew that. to walt that
long, would run the risk of a possible
injunction.
The governor finally communicated
with Mr. Mayo at Lake City. The
chief executive urged the agricultural
commissioner to return to Tallahassee
and attend to his part of the issue.
At a conference here a few days
later, Mr. Mayo announced his refusal
to sign the bonds, and less than a
week afterwards, Judge Clayton
granted the injunction.
With the indebtedness still over
the district, the board has been
pressed for a settlement of a $2,300,000
"bill" held against it by a Baltimore
dredging concern. A small settlement
was made, something In the neighbor-
hood of $80,000, leaving nearly
$2,225,000 to be paid, in addition to
the $10,000,000 bond debt, with the
only hope of liquidating the two debts
lying in the collection of a compara-
tively small amount of drainage taxes
each year.




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