by Paul R. Spitzzeri
The highlighted object from the Museum’s holdings for this post was created almost a half-century after David and Nancy Workman, brother and sister-in-law of Homestead founder William Workman and his wife Nicolasa Urioste, arrived in Los Angeles in October 1854 with their three sons, Thomas, Elijah, and William Henry after a long overland migration from Missouri.
The reunion of David and William, who last resided together in the frontier town of Franklin nearly thirty years prior and when the new state of Missouri was the western edge of the United States, was sadly short-lived. David was immediately employed by his younger brother to supervise the driving of cattle and sheep from the Rancho La Puente to the southern gold fields of the Sierra Nevada Mountains as the first phase of the great Gold Rush was coming to an end and died in late June 1855 after a steep fall while searching for a stray animal.
His widow and sons moved to Los Angeles with Thomas working for Phineas Banning at Wilmington (but dying in the explosion of the steamship Ada Hancock in 1863) and Elijah and William H. opening a saddlery and harness business that existed, on and off, for about a quarter century. William H. married Maria [pronounced Mar-eye-ah] Boyle in 1867 and, after her father, Andrew, owner of Paredon Blanco (White Bluff) on the east side of the Los Angeles River, died four years later, the couple succeeded to ownership of the property.
As the first boom in the Angel City, which started about 1868, peaked in 1875, William H., along with banker Isaias W. Hellman (former partner with William Workman and F.P.F. Temple in the city’s second bank) and merchant John Lazzarovich, established the community of Boyle Heights, named in honor of Andrew Boyle. With the crash of the economy later in the year, however, the project struggled for the next several years, but a much larger boom, which hit its highs in 1887 and 1888, when William H. was mayor of Los Angeles, helped revive its fortunes, along with many areas of the region.
With his substantial real estate interests on the east side, William H., who was known to many Angelenos as “Uncle Billy,” was also a director of the University Bank and a parks commissioner in addition to operating his estate, which included expansive vineyards and orchards. Always an advocate for the development of Boyle Heights, he helped bring improved transportation to the community, including the Los Angeles Cable Railway, as well as better bridges, streets, schools, parks like Hollenbeck and other aspects of infrastructure.
With the dawn of the 20th century, he reentered public service by becoming city treasurer, winning three consecutive elections in 1900, 1902 and 1904 as a rare Democrat, albeit a conservative one, to win office in Los Angeles when Republicans dominated municipal politics. His tenure came during the third major boom in the city’s history and it included his work in finding buyers for bonds for major public works projects, such as the initial funding for the Los Angeles Aqueduct, which, when completed in 1913, allowed for the untrammeled growth of the city for years to come.
Yet, there were other bond initiatives of importance during his six years as treasurer and the focus of this post largely concerns what transpired in 1903, when the original receipt featured here was generated. It’s a modest little artifact, being for payment of $30 by developer Todd Ford to hook up a property at 523 E. Jefferson Boulevard, between San Pedro and Trinity streets, to the city’s sewer system. But, the document, which features the treasurer’s stamped signature, the handwritten one of his deputy and son, Andrew Boyle Workman, the names of the two men and the second deputy, John Kenealy, and a great background vignette of City Hall, then situated on the east side of Broadway between 2nd and 3rd streets, is representative of the third year of “Uncle Billy’s” tenure.
In fact, the vital but decidedly unpalatable subject of sewers was part of the bond issue matter of 1903 as the rapidly growing city sought to improve its outfall sewer which emptied into the Pacific to the west. Bonds, however, were also sought for bridges, including the Fourth Street Bridge leading to Boyle Heights that was a particularly important project for the treasurer for personal reasons, as well as common school purposes and the endeavor to construct a polytechnic high school in the city.
Yet, reported the Los Angeles Express on 1 June, “only one solitary bid was received this morning for bonds proposed to be issued by the city of Los Angeles for municipal improvements.” While bonds were created for such purposes going back decades, the scope and scale were increasingly larger, with this latest one involving nearly $2.2 million. At the time of the Express article, though, only a $100,000 issue for bridge construction was bid on by the Los Angeles Trust Company, which also had a crucial role in the bond process, as will be noted below.
The paper continued that “this result is indicative of a feeling that the interest, 3 3/4 per cent, is not enough in the present condition of the money market.” But, because a previous issue of water bonds sold to a New York bond broker was at that rate, the members of the city council “felt they would be criticized severely if they were to offer the securities this time at a higher rate.” There were observers who believed that 4% was reasonable for current conditions.
With respect to the bonds, the breakdown was that $480,000 was to be for lands and buildings for common school purposes; $200,000 for Los Angeles Polytechnic High School; $1 million for the outfall sewer; $400,000 for storm drains and $100,000 for bridges. The Express noted that the bond issue was in compliance with a state law passed in February 1901 as well with the city charter and were 40-year serial bonds with 2,060 at $1,000 and 40 at $500, dated 11 June, with the interest to be paid in June and December.
On the 6th, the Los Angeles Times reported that an envelope which merely had “Sealed bid for the bonds” and a Cleveland address on its face arrived at the city clerk’s office, though its postmark from 27 May indicated that there had been quite a delay, likely because of terrible flooding in the Kansas City area that held up mail service. The paper, however, also noted the prior day and in that article that there was an effort “in the formation of a syndicate among local bankers to take up the bonds” beyond what the Los Angeles Trust Company acquired.
A couple of council members were actively engaged in negotiations with these banks and it was added that
The agreement made by City Treasurer Workman to allow the money to remain in the banks in proportion to the amount purchased, has had a stimulating effect on the local financial institutions.
This was because, while the city had its 3 3/4% interest rate, most of those funds could be loaned at up to 6% because the monies would not be needed for some months when it came time to start paying for construction expenses and a good deal of it not likely needed for a couple of years or so. When the funds were to be withdrawn, most of the bonds were expected to be sold to good advantage in Eastern markets, but it was also reported that Workman insisted that the banks provide indemnity bonds for proper security.
Notably, the Times added that “as is well known, the vaults in the City Treasurer’s office are not sufficiently secure to warrant the storage of any considerable amount of money,” which is why most of the municipal funds were deposited at banks, with these providing bonds to protect the city against loss. The paper went to to state that “there has been much feeling at times over the disposition that has been made of this money” and the idea that much of it would remain at these institutions for long periods until needed was raised.
It bears observing that, when the city treasurer, James J. Mellus, deposited all of the city’s monies, totaling some $23,000, in the Temple and Workman bank and the institution failed in 1876, there were no safeguards in place and the municipality lost its funds (moreover, the bank’s president, F.P.F. Temple, took office as Los Angeles County treasurer two months afterwards and, remarkably, was allowed to serve his two-year term, albeit with a deputy doing the day-to-day work of the office.)
While it was hoped that there would soon be other bidders for bonds, almost two weeks went by and the local papers began to editorialize on the matter. The Express of 17 June commented that “Mr. Workman already his indicated his willingness to do anything in reason” to get the bonds sold to that local group, “consequently it is in order for those having the plan in hand to meet Mr. Workman with a bill of particulars.” The paper went on to suggest that the offered interest rate was not the problem, but “the sole and only reason why the bonds are not snapped up without delay is because of the activity of the money markets of the East, where capitalists can earn big money on short time loans at the prevailing high rates.”
The Express believed that those unusual conditions would soon change and the city’s bonds be considered attractive and it added that “City Treasurer Workman says he is ready to make any arrangements that will facilitate the deal, and his acts will be supplemented by those of the City Council.” The editorial ended with the observation that it was in the best interests of local bankers to take up the City’s offer and “will be overlooking a good thing if they fail to take advantage of a good opportunity.”
More strident was the Los Angeles Record, which, in its issue of the 17th, declared in its headline, “Don’t Talk About Selling The Bonds, But Go Out And Sell Them!” It warned city officials “let us quit twiddling our thumbs” and that the council should “send City Treasurer Workman down east to sell the bonds” and give him the autonomy to make the best possible deal. It added that the council should “make Mr. Workman our bond drummer. He will be a good one. He has the experience and the necessary conservatism in a business proposition.”
Two days later, the paper repeated “that City Treasurer Workman should, without more ado, be SENT to sell the bonds” because “he is the only man in this town who has FAITH that the bonds can be sold.” While others were reportedly downplaying the notion, the Record reiterated that Workman “BELIEVES that he can sell the bonds if he has a little leaway [sic].” With this discretion, Workman was bound to succeed, otherwise, it concluded “either send Mr. Workman or take the whole issue and sell it to the ragman at 3 cents a pound,” because unnecessary delay would affect the city’s credit and standing.
By mid-July, Workman, Mayor Meredith P. Snyder and City Clerk Henry J. Lelande met at the chief executive’s office and “worked . . . as they never have worked before” in signing the $100,000 in bonds for the bridge issue. After Snyder remarked on how it felt like he’d signed $4 million worth of securities, Workman was quoted as telling City Attorney William B. Mathews “[we] won’t have to take ’em to New York this time. No, sir; no trip to New York this time. Sell ’em right here. Los Angeles securities are top notch.”
The same day of the signing, the 15th, it was learned that the State of California decided to purchase the common school bonds comprising $480,000 with the Los Angeles Trust Company and bond house William R. Staats Company of Pasadena representing the state’s Board of Examiners. Because the negotiations were closely held, it was assumed by the media that eastern bond buyers were involved and, interestingly, the ability of the state to acquire the bonds came about because of a recently passed bill authored by a Pasadena legislator, so small wonder that Staats was involved! It was also rumored that the State would pick up the Polytechnic High School bonds, as well.
This was further discussed in the Express of the 20th who heard from Workman that Governor George Pardee and other state officials that there was definite interest in taking the $200,000 in bonds when they became available if unsold after September when they were to be offered. The city treasurer told the paper that, while some counties offered 4% on their bonds, Los Angeles could get away with less because “state officials regard them with favor, well knowing the ability of Los Angeles to pay its obligations. The standing of this county is excellent, owing to its general wealth.”
Sure enough, in early October, it was announced that the state did acquire the polytechnic high school bonds, though an arrangement was effected by which most of them were taken by a Chicago bond house and a small amount by an insurance company in Canada with the former depositing the bonds with the state “in place of government bonds, to guarantee the operations of the concern in California.” Again, the Los Angeles Trust and Staats companies represented the purchasers, but, in their attempts to secure commissions from the city, Workman emphatically refused, telling the Times in its edition of the 4th,
I will not have it said that the money of this city is being used in such a way as to bring a commission to anybody. I get no commission from any of the banks and I don’t want any; neither will I be a party to any agreement of the kind.
When site selection was underway, there was an offer from Workman to provide a piece of his estate in Boyle Heights, where he residence was situated, on Boyle Avenue between 3rd and 4th streets, but it was determined impracticable because it was across the river. In 1905, the campus was opened at the corner of Washington Boulevard and Flower Street and a series of posts on this blog have featured 1910s issues of the school’s newspaper.
Notably, prior to the deal with the polytechnic school bonds, Workman told the Express, in its issue of 23 September, that the arrangement with the Los Angeles Trust Company with respect to school bond fund deposits there needed a fuller elaboration. In his typical plainspoken fashion, the treasurer stated, “What makes me mad [is] I had prepared a list of a dozen banks in town and promised to divide the deposit equitably between them all,” but, without going into specifics, he went on that “this plan was worked to tie me up and I was virtually forced to deposit the entire amount in one bank.” Moreover, withdrawals of bond monies from the trust company were directly ordered by the city council and Workman “had done his part in maintaining the agreement with the [trust] company when the bonds were sold.”
At the end of 1903, it was announced that the $1 million in outfall sewer bonds were purchased by nine Los Angeles banks in amounts ranging from $50,000 to $150,000 with these institutions including the trust company; Central Bank of Los Angeles; State Bank and Trust Company; Union Savings Bank; Broadway Bank and Trust; American National Bank; Merchants National Bank; National Bank of California; Security Savings Bank; and Farmers’ and Merchants’ National Bank. In addition, there was a 90-day option for these banks to take the $400,000 in bonds for storm drains, which would account for all of the bonds involved. With an estimated two-year timeframe to complete the outfall project, the banks involved were expected to reap a collective profit of $90,000 from interest on the bonds and the interest on loans made with monies deposited before any work was to begin.
The 26 October edition of the Times included a brief article (included in a prior post on this blog) on the city treasurer’s office and a photo that has been featured here before. The description noted that Workman, his son (who was also his deputy when “Uncle Billy” was mayor and would be on the city council, including its president, for much of the 1920s), and other staff collected over $1 million in taxes with bond and franchise sales, license fees and others boosting the total to near $5 million, about a quarter higher than in 1902. New legislation requiring the office to handle street improvement monies meant that Kenealy and Antonio C. Roques were specifically clerks handling street bond matters.
Humble as it is, the receipt is an excellent reference point for William H. Workman’s important tenure as Los Angeles City Treasurer during a time not only of major growth for the municipality but for the expansion of the role of government broadly, including in carrying out a broader range of more complicated and sophisticated public works projects.