EARLY HISTORY OF IMPERIAL COUNTY
Early in 1892, while located at North
Yakima, Washington, I received a letter from one John C. Beatty,
writing from Denver, sending to me a prospectus and plans of what
was called the Arizona & Sonora Land & Irrigation Company. They
proposed to take water from the Colorado River and carry it on to a
tract of a million and a half acres in Sonora, which they claimed to
own. The board of directors of the company consisted of several of
the leading financial men of Colorado, and Mr. Beatty's desire was
that I should make them a proposition whereby I would become the
chief engineer of that project and undertake the construction of its
proposed canals.
After a correspondence extending over a
period of four or five months, I finally met Mr. Beatty at Denver in
August, 1892, and entered there into an agreement with this company,
and in September of that year came to Yuma in order to outline and
take charge of the project of their company.
In Denver I met Mr. Samuel Ferguson, who
afterward became connected with me in the promotion of the
California Development Company and who was at the time the general
manager of the Kern County Land Company, situated at Bakersfield,
California, and he met me in Denver in order to outline their
project to me before I might close with Mr. Beatty. As the Kern
County canal system was partially completed, I decided to undertake
the new project rather than the rebuilding of an old house, with
the result that I came to Yuma in September of the year 1892 and
undertook surveys to determine the feasibility of the Arizona &
Sonora Land & Irrigation Land Company's proposition. After
projecting these surveys I decided that the irrigation of the Sonora
land at the time was entirely unfeasible and reported to my people
that, in my opinion they would lose any money they might spend on
the project.
In the meantime, however, while these
surveys were in progress I had taken a team and made a trip into
that portion of the Colorado Desert which is now known as the
Imperial Valley. We knew that during the flood of the Colorado River
in the year 1891 the overflow had found its way into the this
territory. Mr. Hawgood, at the time the resident engineer of the
Southern Pacific Company at Los Angeles, had for his company made a
study of this overflow and from the data at his command had compiled
a map of the territory. This map, as well as the government surveys
of 1854 and 1856, showed that not only was there in all probability
a large area of fertile land in the valley, but that these lands lay
below the Colorado River and could be irrigated from it. Many years
before this, Dr. Wozencraft of San Bernardino had attempted to get
the government to turn the water into what is known now as Salton
Sea, not for the purpose of irrigation, but for the purpose of
creating a large inland lake in the hope that it would ameliorate
the severe climatic conditions that obtained in this territory.
The result of my investigations at this
time was such as to lead me to believe that, without doubt, one of
the most meritorious irrigation projects in the country would be
bringing together the land of the Colorado Desert and the water of
the Colorado River.
In the preliminary report made to the
Denver corporation early in the year 1893, I urged them to undertake
the surveys which might be necessary in order to prove or disprove
my belief, and I was authorized to run preliminary lines in order to
determine the levels, the possible acreage of available lands and,
approximately, the cost of construction.
They were so well assured from the
nature of my preliminary report that the Colorado Desert project was
a meritorious one that they immediately took steps to change the
name of their company from the Arizona & Sonora Land & Irrigation
Company to that of the Colorado River Irrigation Company, and
assured me that if my report, after making the necessary surveys,
was sufficiently favorable, they had back of them a fund of two
million dollars to carry out the project.
I undertook them during the winter of
1892-1893 very careful surveys, starting from a proposed heading
about twelve miles above Yuma, at a point called the Pot Holes,
situated about one mile below the Laguna dam of the reclamation
service; the surveys extended from this point into the Colorado
Desert and around to the Southern Pacific Railroad in the
neighborhood of Flowing Well.
It was necessary for the canal to enter
Mexico. All of the lands in Mexico were owned by General Guillermo
Andrade, although the Blythe estate claimed to own one-half of the
Andrade lands. Beatty, unfortunately for him, consulted his personal
friend, General W. H. H. Hart, who was at the time attorney general
for the State of California, as well as attorney for the Blythes.
Hart showed so little faith in Andrade's ability to deliver title
that Beatty, instead of attempting to placate Andrade and obtain his
co-operation, succeeded in antagonizing him and was afterward unable
to enter into any agreement that would permit his company to build
in Mexico.
In the panic of 1893 most of the
directors of the Colorado River Irrigation Company were so crippled
financially that they were unable to carry out this project,
notwithstanding the fact that my surveys and reports developed a
much more favorable proposition than my preliminary report even had
anticipated. Unfortunately, Mr. Beatty, who was the promoter and
manager of this enterprise, was of the Colonel Sellers type of man
and his ideas were not always practical.
Beatty, however, not discouraged, went
to New York in that year and attempted to secure the funds required
for construction. He eliminated from his board of directors the
Denver people, substituting very strong New York men. Among his
original New York board was John Straitton, the multi-millionaire
president of the Straitton & Storm Cigar Company, manufacturers of
the Owl cigar; F. K. Hains, superintendent of the Manhattan Elevated
Railway Companies; Thomas L. James, postmaster general under
Cleveland's administration, and several other men of equal
prominence, but whose names I forget.
Those men were mostly dummy directors,
receiving in addition to the stock bonus for use of their names, so
much for every time they attended a director's meeting, and Beatty
succeeded in obtaining very little aid financially from them. He had
interested, though, a cousin, James H. Beatty, of Canada, from whom
he obtained a great deal of financial assistance. James H. Beatty, I
believe, put in over fifty thousand dollars at this time, but in the
next year, 1894, he not only withdrew his support, but entered suit
against John C. Beatty in order to prevent him from selling any more
stock in the Colorado River Irrigation Company.
As an illustration of the character of
John C. Beatty, in March, 1894, he came from New York to Los
Angeles. At the time I had not been paid for my services to the
company; on the contrary, while a sufficient amount of money had
usually been forthcoming to pay the monthly bills, when I disbanded
the engineering forces in June, 1893. I was obliged to pay part of
the men from my own funds, and at the time of Mr. Beatty's visit to
Los Angeles in 1894, I had not succeeded in getting a refund of
Consequently, I told Mr. Beatty that as other creditors had not been
paid that I proposed to bring suit quietly in order to gain legal
possession of all the surveys and engineering equipment in order
that it might not be scattered among various creditors and its value
rendered largely nil. I told Beatty it would be useless for him to
defend it and that I would give them six months if I obtained
possession of the property in which to redeem it. He agreed to this
and left Los Angeles for the City of Mexico to obtain, as he said,
the right from the Mexican government to carry his proposed canal
through Lower California in spite of the opposition of General
Andrade. Mr. Beatty, at this time, was practically broke, as I
judged from the fact that notwithstanding he had on a new suit and
looked as if he had come from a tailor's shop. I unfortunately
accompanied him as far as Yuma on this trip, and when, after getting
his supper at the station, he put his foot on the car step, he
turned to me and said: "By the way, Rockwood, I believe I am a
little short of cash. I will get plenty in El Paso. Let me have ten
dollars until I get there when I will return it." I did this and I
have never seen the ten dollars since, although Mr. Beatty did
succeed in raising $100 in El Paso by getting a stranger to cash a
sight draft on the Colorado River Irrigation Company of New York for
that amount. At that time, the Colorado Irrigation Company did not
have a dollar in its treasury, nor did it have a treasurer. After
Beatty got his hundred dollars he went to Mexico. There,
notwithstanding the fact that he spoke the language fluently, and
had many acquaintances in the city, he fell into financial depths to
such an extent that he was unable to pull himself out and get away
from the country until his son Herbert, a young man then in his
twenty-first year, sent him $250 from Providence, Rhode Island, and
told his father to get back to Providence as soon as possible as
they could raise all the money they required there.
The $250 which Herbert sent to his
father in Mexico was half of $500 which he succeeded in borrowing
from a man by the name of Green, living in Providence, Rhode Island.
This man Green, Beatty had met at Chicago during the world's fair
the previous year, and having at that time discussed the
possibilities of the Colorado River project with him, had gone to
Providence to see if he could obtain any funds from him.
Beatty returned from Mexico to Providence in July, 1894. I went east
from California in the same month, and having interested myself with
General Andrade and believing that it would be impossible for Beatty
to carry out any scheme of irrigation, I went to Scotland in
September of that year in order to see a syndicate of Glasgow and
Edinburgh men who held an option from Andrade on all of his lands in
Lower California. My desire was to see if I could not induce these
men to raise the necessary capital to carry out the project and to
join the Lower California lands with those north of the line and
finance the whole thing as a complete project, but very much to my
disgust I found that these Scotch people were all interested in the
coal trade; that coal had taken a tremendous slump in a few months
previous, and that these men were so financially stricken that they
could do nothing; they would not, however, agree to give up their
option except at a very high figure figure. Consequently, I was
obliged to wait until the expiration of this option, which was to
take place on the 15th day of May, 1905.
I returned from Europe in October,1894,
and found a letter waiting me at my hotel in New York from John C.
Beatty urging me to visit him in Providence, Rhode Island, before I
returned to California. I decided to do so and went to Providence.
Mr. Beatty, who, you will remember, was broke in Mexico City in July
of the same year, met me at the train and insisted that I should go
to his house instead of a hotel, and I accepted his invitation. He
took me to one of the suburbs of Providence, the old village of
Pawtuxet, and to a beautiful old colonial house situated in ten
acres of ground sloping down to Naragansett Bay. The property, which
I can readily believe had originally cost over $50,000, had been
repainted, replumbed, green houses rebuilt, solid marble washstands
with silver trimmings put in every bedroom, and two new bathrooms
had been built. I looked at Beatty in astonishment. The only
explanation he would give me was that he had come to the conclusion
that in order to raise money in Providence it was necessary to be
one of the people and not a carpet-bagger, and for that reason he
had purchased this place from the noted evangelist, Rev. B. Fay
Mills. I discovered afterward that the only money that the Rev. B.
Fay Mills had received from Mr. Beatty was the sum of $500, payable
on account of purchase, the remainder to be paid after Mr. Beatty
had examined the records, but unfortunately Mr. Mills had given
Beatty possession. The $500 which he paid Mills had been borrowed
from this same Nathaniel Green. Of all the bills, plumbers',
carpenters', painters', bills for furniture and dishes, I was told
that not one had been paid, and that Beatty had succeeded in paying
the workmen in notes so it was impossible for them to get a lien on
any of the property.
Beatty had a thousand dollar piano in
the house on which he had paid nothing. One of his daughters, who
was a fine musician, played for me in the evening. I noticed that
she had but a few sheets of music and I afterwards discovered that
all of her music was in her trunks and that the trunks if the entire
family were then being held in the Murray Hill Hotel in New York for
non-payment of bills.
When I landed in Providence in
October, 1894, at Beatty's request, he first took me out to his
house where I remained overnight and the next morning he took me to
his offices down town. His offices were, at that time, in the finest
building in the town, he took me to the top floor of the building,
where I found he had a suite of six magnificent rooms most
beautifully furnished; he had four stenographers employed and,
wonderful to say, he had his showcases and tables filled with
oranges, lemons, bananas, figs, apricots, all products of the
Colorado Desert, which, at that time, was producing nothing but a
few horned toads and once in a while a coyote.
He also had in Providence six agents
at work who were rapidly bringing in the coin, because it was
afterward discovered in a suit brought against Beatty and his
company that he had obtained from the people of Providence between
his coming there in the latter end of July and this time, which was
about the middle of October, something over $35,000, in cash;
notwithstanding the fact that his cousin, James H. Beatty, had
succeeded in getting an injunction preventing him from selling any
of the stock of the Colorado River Irrigation Company. Beatty had
obeyed this injunction, but, under a technicality, had immediately
turned around and sold his own private stock in the company;
consequently, the money, instead of being property of the company,
was his own property and was evidently devoted to his personal uses.
Beatty desired me to remain in
Providence in order to help him finance his scheme. He assured me
that he had men in tow who, if everything could be shown up to them
to be all right, would put up all of the money that was necessary to
carry the enterprise through, but I refused to join Beatty in his
proposition unless he would put the enterprise in what I considered
an honest business shape, which was to throw out his entire basis of
capitalization. His Colorado River Irrigation Company was
capitalized for seven and a millions, which was based at $5.00 an
acre upon one and a half million acres of land wholly in Sonora,
which lands were not worth two cents an acre and never could be made
worth any more, and which had no more connection with the enterprise
of the Colorado Irrigation Company than if they had been situated in
Alaska; But if Beatty were to abandon these lands as a basis of his
capitalization, he would have no reason or excuse for holding the
control of the stock of the company - consequently he refused
absolutely to consider the reorganization and a decrease in the
capitalization of the company. I declined then to have anything
whatever to do with him and came to California.
After I had notified Mr. Beatty in
March, 1894, that I should bring suit to secure myself against other
creditors, as well as to secure the company, I brought suit both in
Los Angeles and in Yuma, Arizona as the property was at that time
partially in Arizona and partially in Los Angeles, and succeeded by
means of the suit, in obtaining legal possession of all the personal
properties.
Later, I believe it was in the winter
of 1895, Mr. Beatty, who had not yet given up his attempts and his
hopes to carry out the Colorado River enterprise, attempted to buy
back from me the properties which I had acquired under the judgment
and offered me water rights in the Colorado Desert on the basis of
$10 an acre for the entire amount of my judgment. When I pointed out
to him that I already owned water rights covering at least 600,000
acres, that all that was necessary for me to do to make these rights
good was to construct canals and take water to the land, Mr. Beatty
became generous and offered to reduce his price of $10 for water
rights to $5, but this offer I declined.
Coming to California in October, I went
to Bakersfield to call upon Mr. Ferguson, who, as I have stated, was
the manager of the Kern County Land Company, and who had carried
through large projects. He had been connected with the Southern
Pacific Railway Company in various land enterprises, and has spent
much time in Europe in connection with the enterprise of the Kern
County Land Company, and I believed him to be best constituted by
his experience and ability to assist me in the work of raising funds
for the development of the Colorado Desert enterprise should the
time arise when I could take that work up. I believed that that time
would come as soon as the option held by the Glasgow people had
expired on the Andrade Islands.
I had, at this time, very little faith
in my own ability as a financier or promoter. All of the years of
my life up to this time had been spent in the interest of the two or
three corporations by whom I had been employed in technical
engineering work. I had not come in contact with the business world
nor with the business men and I felt that it was necessary for me
to join with myself some man who had, in experience, that which I
lacked.
I succeeded in interesting Mr. Ferguson
so that when the Glasgow option expired on the Andrade lands on the
15th of May, 1895, I immediately secured from General Andrade on the
payment of $5000 another option for myself and associates covering
the lands or a portion of the lands in Lower California. Mr.
Ferguson then severed his connection with the Kern County Land
Company and joined me in the promotion of the new enterprise. The
five thousand dollars mentioned which I paid Andrade at this time
was furnished by my friend, Dr. W. T. Heffernan, who told me some
time previous during the Beatty regime, that he believed in the
enterprise and would like to invest money in it. I told the doctor,
without explaining fully my ideas if John C. Beatty, to keep his
money in his pocket until I told him to bring it forth, which he
did.
At this time I had decided that as the
Denver corporation with its promised millions was not back of me,
and that the proposition would require very much less money and
consequently would be easier to finance if the water, instead of
being taken out at the Pot Holes, should be taken from the Colorado
River on the property of Hall Hanlon, immediately above the
international line between Mexico and the United States. After
acquiring the Andrade option, negotiations were opened with Hanlon
for the purchase of his 318 acres of sand hills and rocks; but very
much to our chagrin we found that Mr. Hanlon realized fully that he
held the key to the situation and that instead of being able to
purchase his property for possibly two thousand dollars, which was
far in excess of its value for agricultural purposes, that he had
fixed the price at $20,000, and to this price we finally had to
accede and paid him $2000 on account. This $2000 was also furnished
by Dr. W. T. Heffernan, without whose financial assistance at this
time, and for several years afterward, it would have been utterly
impossible for me to have carried on the work of the promotion. To
Dr. Heffernan, his steadfast friendship for me personally, and to
his faith in the ultimate outcome of the enterprise, I believe is
largely due the success which afterwards accompanied our efforts,
and to him is very largely due the credit of bringing the water into
Imperial Valley.
I presumed, of course, that Mr.
Ferguson would be able to secure all the funds that would be
required in very short time. In fact, he told me so, and I presume,
like many others, I am inclined to take a man at the estimate which
he puts upon himself until something proves different. I had made of
him an equal partner, he putting in nothing, although I had put in
some two years' labor and considerable money, together with all the
engineering surveys and equipment, etc., representing the
expenditure of over $35,000.
Unfortunately, he failed in his
efforts to secure funds, and I soon found that while personally to
me he was a very delightful friend and companion, that his
connections with me were a source of weakness instead of strength.
As, for instance, in the summer of 1894, I had several long talks
with Mr. A. G. Hubbard of Redlands regarding the enterprise. Mr.
Hubbard became greatly interested and promised me that as soon as
the weather cooled in the latter part of September or October, he
would make a trip with me over the desert, together with an engineer
of his own selection, and that if the estimate of his engineer did
not more than twice exceed my estimate, as to the amount of money
that would be required, that he would finance the enterprise. At the
time he told me that there would be one reason that might prevent
him from doing so, and that was he might be obliged to take up the
Bear Valley enterprise; that while his investment in the Bear Valley
enterprise was not of such a magnitude but what he might lose it
without crippling himself, that his pride was wrapped up in its
success. Afterward, I think in August of that year, Mr. Hubbard met
me in Los Angeles and said that he had decided to take up the Bear
Valley proposition and would be obliged to drop the Colorado Desert
project. Had Mr. Hubbard at that time been entirely frank with me,
the history of the enterprise would in all probability be a very
different one from what is today, for while he did take up the Bear
Valley enterprise, a year later he confided to one of my associates,
Mr. H. W. Blaisdell, and afterward to myself, that the real reason
for dropping the enterprise was less on account of his connection
with the Bear Valley proposition than for the reason that I had
associated myself with Mr. S. W. Ferguson and had made him the
manager, and from his knowledge of Mr. Ferguson's management of the
Kern County Land Company, he decided that he did not care to be
connected with him. In answer to my question as to why he did not
tell me this at the time in order to allow me to remove Mr.
Ferguson, he said that his only reason was that he had plenty of
money himself and he did not see why he should get mixed up in a
quarrel.
In June, 1895, Mr. Ferguson went to New
York to see some financial men there regarding the project, but
succeeded in accomplishing nothing and returned to California in
July or August.
It was about this time that Mr. A. H.
Heber, who was the Chicago agent of the Kern County Land Company,
under Mr. Ferguson, came to California and Mr. Ferguson introduced
him to me as a man who might be able to materially assist us in
securing funds to carry on this work as well as in handling the land
and obtaining colonists in the future, but no connection was made
with them. Afterward, in November, 1895, both Mr. Ferguson and I
went to Chicago, and after remaining there for a few days, Mr.
Ferguson went to New York, while I remained in Chicago to get out
the first prospectus maps which were being printed for us by
Rand-McNally.
While in Chicago on this trip, I made
Mr. Heber's office my head-quarters, and becoming better acquainted
with him and his business methods, he impressed me more favorably
than in my first interview with him in the spring, and after I went
on to New York in December and found that Mr. Ferguson was not
succeeding as I had hoped in securing funds, we decided to have Mr.
Heber join us. Heber's connection then with the enterprise dates
from the time that he came to New York to join Ferguson and myself
in the month of December, 1895.
We made our office in New York with
Herbert Van Valkenburg, who was one of the old stockholders and
directors of John C. Beatty's Colorado River Irrigation Company, and
a scion of a very wealthy and prominent New York family of bankers
and merchants. We employed as our attorney in New York Mr. E. S.
Rapallo, a brother-in-law of Mr. Van Valkenburg, and who was at that
time, and is now (1909) attorney for the Manhattan Life Insurance
Company, one of the attorneys for the United States Trust Company,
and one of the attorneys for the Manhattan Elevated Railway Company.
To Mr. Rapallo we submitted all our papers, even our advertising
matter, in order that we might be assured that we were proceeding on
strictly legal lines.
Neither Mr. Ferguson nor Mr. Heber
succeeded in securing funds or assurances as rapidly as we had
hoped. We decided, nevertheless, to proceed with the organization of
the company and that its name should be the California Development
Company. We perfected the organization of the company on the 26th
day of April, 1896.
At the time of the organization of the
company, I was not in New York. I had been obliged to return to
California and from California I had gone to the City of Mexico to
obtain from the Mexican government certain concessions which were
necessary, and the company was organized during my absence, Mr.
Heber being made president. Neither Mr. Ferguson nor Mr. James H.
Beatty, who at the time was an equal partner with Ferguson and
myself, was made a director of the company, nor was I, for the
reason that all the properties which we had acquired were in the
possession of the three of us, and these properties, were afterward
sold to the company, we taking out in payment therefor a portion of
its capital stock, which stock was afterward sold or divided among
our associates. After this transaction had taken place both Mr.
Ferguson and myself went upon the board of directors, I becoming its
vice-president, which position in the company I held until the year
1899, when I became the president of the company, until the contract
with George Chaffey was entered into in the year 1900 whereby he
became president of the company, and I its vice-president again, but
that I will speak of again in the future.
While I was in the City of Mexico in
April, 1896, I received from Mr. Heber that he had succeeded in
interesting the Mennonite Church of Kansas in the project, and that
he would arrange to meet me with a committee of the Mennonites to go
over the lands on my return from Mexico. I came from Mexico on my
return trip in May, 1896, and at Yuma met Mr. Heber and three
members of the church headed by the Rev. David Goerz of Newton,
Kansas. These gentlemen I took for a trip from Yuma through Lower
California, then returning to Yuma shipped a team from there to
Flowing Well, from which point we drove out across the Alamo to
very near the present site of the town of Imperial. These men were
greatly impressed with the country and we hoped for material aid
from them, but succeeded in obtaining, I think, not exceeding $2000,
and the colonists we expected to get from that source were not
forth-coming, very much to our disappointment. Mr. Heber and I
returned east to Chicago in the month of July.
Previous to my going east this time I
had some talk with Mr. H. W. Blaisdell of Yuma, Arizona, who had
been a successful mining man and at that time was largely interested
in development work in and around Yuma and who had, as well, an
influential connection in Boston. The result of my talk with Mr.
Blaisdell was an agreement whereby he was to undertake to secure
funds for us in Boston during the summer. He met me in New York and
my agreement with him was confirmed by my associates there and Mr.
Blaisdell went on to Boston.
Neither Mr. Ferguson nor Mr. Heber nor
I succeeded in raising any considerable amount of money during the
summer. Mr. Blaisdell had gotten in touch in Boston with capital and
I knew from my talks with him that he could put in if necessary a
few thousand of ready cash to keep the machinery moving, but at this
time Mr. Ferguson not only had not raised any money whatever, but
had succeeded by his expense account in largely depleting or
treasury, and neither Mr. Heber nor I were willing to see at that
time any more money go into the treasury until a different
arrangement could be made with him. He, however, had his interest in
the stock of the company and it was necessary to find some purchaser
for his interest before he could be successfully eliminated. I found
this purchaser in Mr. Blaisdell, who succeeded in raising the funds
necessary to buy out Mr. Ferguson's interest under a proposal which
I made to Ferguson. This was done in September, 1896, after which we
put Mr. Heber in as general manager as well as president of the
company, and Mr. Blaisdell came upon the board of directors.
Mr. Blaisdell was at this time
negotiating with Mr. H. W. Forbes, who had been for several years
the president of the Bell Telephone Company, and was reputed to be
worth fifteen millions. Mr. Forbes was very much enthused over the
project as outlined, but he was a man well along in years and
desired the enterprise not so much for himself as for his two sons
who had just left college and desired to come west.
The result of the negotiations with Mr.
Forbes was that he agreed to put up the required capital for the
development of the enterprise, providing that the report of the
engineer he should send to make an examination was entirely
satisfactory. The specific agreement at that time was that if the
report of his engineer disputed any of the material statements in
our prospectus, which had been written by myself, that we would pay
the cost of the report; otherwise Mr. Forbes was to pay for the
report.
When these negotiations were concluded,
I was in California, where I had been obliged to come in order to
make a new contract, if possible, with General Andrade, for the
reason that we were unable to make the payment to the general in
accordance with the old contract, and I desired to make a new
contract before the old one should become void by the expiration of
the time limit. This I finally, after some trouble, succeeded in
doing. The general was loath to enter into another agreement as a
year and a half had now elapsed since the time that he had given me
the first option and he was beginning to doubt the success of my
efforts. I, however, did succeed finally in making a contract which
reduced our option from 350,000 acres of land to the 100,000 acres
afterward purchased by the company.
While in California, I received a
telegram from Mr. Blaisdell that Mr. George W. Anderson of Denver,
the engineer selected Mr. Forbes to examine the project, would meet
at Yuma on a certain date. I met Mr. Anderson at Yuma, in October,
1896, and went with him over the territory and over all our plans
and profiles. He then returned to Denver while I proceeded to the
City of Mexico to put up a few fences there that were somewhat
broken down, and returned from the City of Mexico direct to New York
in November, 1896, expecting, of course, as I knew that I would have
to do would be to go to Boston, perfect the arrangements with Mr.
Forbes, and then return to active construction work on the desert.
When I reached Boston Mr. Anderson's
report was there and was all that could have been hoped for; in
fact, his report was more glowing than the statements made in our
prospectus; but while Mr. Forbes paid for the report in accordance
with the contract and afterward turned it over to us to be used as
we might see fit, he did not take up the enterprise; the reason that
he gave was the state of his health, while I knew that the real
reason of his desiring to go into the enterprise in the first place
was for the benefit of his sons. I doubted somewhat this statement,
but never received proof that the statement given by him was not
entirely correct until his death four months afterward, when I was
told by one of his most intimate friends that the real reason why
Forbes did not take up the enterprise was that at the time he sent
Mr. Anderson to make his examination he also wrote a letter to a
close personal friend of his in San Diego regarding the
possibilities of development in the Colorado Desert, and received
word in reply that the project was wild and utterly unfeasible; that
the country was so hot that no white man could possibly live in it;
that the lands were absolutely barren, consisting of nothing but
sand and alkali; and that any man who was foolish enough to put a
dollar into that enterprise would surely lose it. I attempted to
find out the name of Mr. Forbe's San Diego correspondent. I have
been trying all of these years to find out the name of that man, but
so far have failed. I still have hopes to meet him.
We were all, of course, very greatly
disappointed by this failure. Mr. Blaisdell remained there during
the winter, but had to leave in order to take up his Yuma work in
the spring. I remained most of that time in Boston, Mr. Heber being
in New York; in fact I remained in Boston until August of the year
1897. During the summer of that year I spent the months of June and
July in one of the Boston hospitals with the typhoid fever, but on
my recovery I decided to make a trip to Europe in order to see if I
could interest capital there.
On the trip I had letters of
introduction to various financial men of London, Scotland, and
Switzerland. I particularly desired to interest a firm of brokers in
Glasgow who had been instrumental in furnishing funds for two
irrigation enterprises in the northwest, but in as much as these
enterprises had failed from the point of view of the foreign
investor, I found that to interview them on the subject was like
shaking a red flag before a bull and that nothing could be
accomplished. I then visited the home of a banker in the interior of
Scotland, to whom I had personal letters from Mr. D. I. Russell, but
on leaving the train at his town and inquiring for his residence,
was shocked to learn that he had been found dead that morning,
drowned in a little stream that flowed behind his house. I then
returned to London expecting to leave at once for Basle,
Switzerland, to take up negotiations with a gentleman there who had
succeeded in financing two American enterprises of a similar nature,
and from whom I have received letters previously that led me to hope
that the money necessary for the development of our enterprises
could be found there. In reply to a telegram to ascertain if he
could meet me on a certain date, I received word that he had died
two weeks previously.
I had in London met a firm of brokers
who had years previously been somewhat connected with Mr. Heber in
some of his operations in Kansas, and to whom Mr. Heber had given me
letters of introduction. These gentlemen became so much interested
in the proposition that, although I decided for several reasons to
return to America, I left them working on it. Afterwards we received
communications from them that led both Mr. Heber and me to believe
that the money could be secured through this source, but in the
meantime I had opened negotiations for the funds required with Silas
B. Dutcher, president of the Hamilton Trust Company, of Brooklyn, N.
Y. Mr. Dutcher made a very careful examination of the enterprise
extending over several weeks. It was passed upon by his attorneys
and engineers and finally, on the 14th of February, 1898, Mr.
Dutcher said to me: "Everything is all right, Mr. Rockwood. I have
talked the matter over since obtaining the reports of our attorneys
and engineers with the controlling directors of the trust company,
who agree with me that it will be advisable for us to advance you
the money, and, under the agreement outlined between us, we will put
up the funds. It will be necessary, however, that our board shall
formally agree to this, and this final formality will be gone
through at our board meeting on Friday."
At this time our treasury was empty,
both Mr. Heber and myself had exhausted our private funds and we
were exceedingly economical in our table, but I was so rejoiced at
the decision of Dutcher, and, believing without doubt that our
financial troubles were over for the present, that I went back to
New York and invited Heber out to a square meal, on which I think I
spent at least one dollar. The next morning, however, we were
confronted by glaring headlines that the Maine had been sunk the
night previous in Havana harbor. I went over immediately to see Mr.
Dutcher in order to ascertain what effect this might have upon our
negotiations and found, as supposed, that the deal was off.
On account of the period of depression
which then followed it was absolutely impossible to interest any
large financial men in the enterprise, and it was with exceeding
difficulty that we got together sufficient funds to keep up our
payment to Gen. Andrade and to keep our office doors open. We did,
however, succeed in doing this, and later, in the summer of this
year, we found it had again become necessary to make a new contract
with Gen. Andrade for the reason that the old one was about to
expire, and, as usual, I was deputized to obtain the new agreement,
but before getting this agreement, it was deemed necessary for me to
make a trip to the City of Mexico, and I left New York immediately
before the beginning of war with Spain on the steamer Yucatan for
Vera Cruz by way of Havana. As we were expecting war to be declared
every day, people were loath to leave New York for Havana, and I
remember there were only two other passengers on the steamer from
New York, one of whom was interested in Havana, the other was going
to the City of Mexico. We reached and left Havana, however, without
mishap, although when we arrived there we were forbidden to land.
All the Americans had left with the exception of Consul Gen. Lee,
who, I believe, left the city three days afterward.
It was on this trip to the City of
Mexico that I found it necessary to organize the Sociedad de
Terrenos y Irrigacion de la Baja California, now generally known to
the people of the Imperial Valley as the Mexican company. The
prevailing idea among the people is that this Mexican company was
organized by the California Development Company as an inner ring for
some ulterior purposes that might make the legal position of the
California Development Company stronger as against any actions in
the courts of the United States. As a matter of fact, this company
was organized for the purpose of holding title to the lands in Lower
California which had been purchased from Gen. Andrade by those
interested in the California Development Company.
I had attempted for two years with the
help of Gen. Andrade and our attorneys in Mexico to obtain the right
from the Mexican government for the California Development Company
to hold these titles, but the decision of the Mexican officials and
courts were finally against us, and it was on the advice of our
attorneys in the City of Mexico that it would be absolutely
necessary to hold title to these lands in a Mexican company that the
Mexican company was formed.
After perfecting this organization, I
went from the City of Mexico to Los Angeles in order to take up with
Gen. Andrade the question of a new contract, but found that I was
up against a stone wall; the general positively refused not only to
grant my extension on the old contract, but refused as well to enter
into a new one unless I should advance to him a sum of money which
was absolutely beyond my power to produce. I attempted to argue with
the general that he was working against his own interests, but it
seems he had lost entire confidence in the ability of myself and
associates to carry through the enterprise and seemed to be
absolutely fixed in his determination to grant no further
concessions. As I knew, however, that our ability to carry through
the enterprise depended upon my ability to obtain possession of the
Mexican lands and through them the right of way, I insisted that
Gen. Andrade should make a new deal with me, and it became largely a
question of will power, as the general remained fixed in his
determination to grant no further concessions. I believe it took me
about ninety days to obtain the new contract that meant the
continuation of the life of the enterprise, during which time I went
to Gen. Andrade's office or to his hotel every day, until I verily
believe he was forced to give me what I asked in order to get rid of
me; at any rate he has so stated since, but was gracious enough long
before his death to tell me that it was exceedingly fortunate for
him that I was so persistent.
Having made the new arrangement with
Andrade, I returned to New York, and, the correspondence from
Tyndall & Monk, of London, the brokers to whom I previously
referred, being of a nature which led Mr. Heber and myself to
believe that these gentlemen were going to be able to furnish us
with the funds, I immediately took steamer to London.
This, I believe, was in September, 1898. After
seeing the brokers in London and being assured by them that they
would be able to furnish the money under certain conditions, I
wired Mr. Heber to come on to London, and on his arrival we
proceeded to draw up the form of bond and trust deed which,
under the English procedure, required a very long time and was
also exceedingly expensive. Having, however, gotten the work
well under way, Mr. Heber returned to New York in November of
that year and I followed in December in order to perfect certain
details in California that were necessary for the assurance of
the proposed English investors.
We supposed that everything was
assured, but for some reason that I never as yet been able to
ascertain, that deal fell through, and in such a manner that we
knew it was utterly useless to attempt to obtain any further
assistance from the firm of Tyndall & Monk; consequently our
efforts were again devoted toward the obtaining of funds in
America.
We were now in the spring of 1899,
our funds were exhausted and we hardly knew which way to turn. I
was born in Michigan and had several wealthy and influential
acquaintances in Detroit and its neighborhood, and Heber and I
thought it best that I should visit Detroit and see what might
be done there toward obtaining funds, but at this time we had no
money with which to pay my traveling expenses until Mr. Heber
solved the problem by raising $125 on his personal jewelry and
gave me $100 of it with which to make the trip.
In the troubles that arose between
Mr. Heber and myself afterward this act has never been
forgotten, and one of the greatest regrets of my life is that
the ties of friendship with one capable of such self-sacrificing
generosity should be strained and broken.
In Detroit I succeeded in obtaining
funds to the amount of a few hundred only, sufficient only to
keep up our living expenses and to keep our office rent in New
York paid.
Mr. Heber, at this time, met in New
York a friend from Chicago who had advanced him some money, and
had succeeded in inducing Heber to return with him to Chicago on
the belief that money might be obtained there to carry out the
enterprise; so Heber left New York for Chicago in the month of
June, 1899, calling upon me in Detroit on his way through. His
Chicago efforts, however, were not immediately successful, and
just at this time I received a telegram from Ford & Company,
bankers of Boston, asking me if I would go to Porto Rico to report upon a sugar proposition
which they owned there. They had decided to build a system of
irrigation for their plantations and desired my report upon the
feasibility of the plans of their engineer. They wired me that
if I would go they would wire me money to come on to Boston and
talk the matter over with them. As I was practically broke at
the time, I immediately agreed to go, and received in reply
sufficient funds to make the trip from Detroit to Boston.
I proceeded immediately to Boston
and made my financial arrangements with Ford & Company, who
advanced me, in addition to my steamer transportation, a check
for $250. I was loath to accept the check in lieu of cash
(although I didn't say so to them) as it was after banking hours
in Boston and I could not get the check cashed until I had
reached New York, at which point I was to take steamer, and I
doubted very much whether I would have sufficient money to pay
my expenses through. I did, however, succeed in reaching New
York that night, but was obliged to wait my breakfast the next
morning until I could get Ford & Company's check cashed.
I left this same day for Porto
Rico by steamer, and after spending a couple of weeks on the
plantation of Ford & Company, who, by the way, were the
financial agents for the United States Government in the island,
I left the plantations, which were on the southern side of the
island, for the city of San Juan on the northern side in order
to take the steamer again for New York. On my way across the
island I decided to remain in the town of Cayay to examine into
a water proposition in that neighborhood that might be of
interest to my Boston clients. It was there, on the night of
August 7, 1899, that I experienced my first and only West Indian
hurricane, which probably many people of this country still
remember. In the small hotel where I was stopping my sleeping
room was immediately off the main living room. I was awakened
about three o'clock in the morning by the rocking of the house
and by the sound of weeping women and children in the outer
room. Hurriedly dressing, I went to the outer room, and upon
making inquiries as to the cause of the trouble, I found that I
was in the beginning of what afterward proved to be the most
disastrous hurricane that had visited the islands for a period
of over two hundred years. The wind lasted from about three
in the morning until two in the afternoon, at the end of which
time the mountains surrounding the town, which the day previous
had been a scene of beauty, covered with the vegetation and
flowers of the tropics, were as brown as our California hills in
summer, and in Cayay, a town of 1200 inhabitants, but six
buildings were left standing and but 800 people were left alive.
On the island during the storm over 6000 were killed, the bodies
of about half of whom were never recovered, having been swept
out to sea or buried in the debris brought down by the mountain
torrents.
I was not injured by the storm, but during my
efforts two days afterwards to reach San Juan, my clothing was
practically destroyed, so that I reached New York looking more
like a tramp than a prosperous promoter of an irrigation
enterprise.
On my arrival in New York, I found
that Mr. Heber was still in Chicago and that our New York office
was being used by Mr. S. W. Ferguson, who had come to New York
again on interests not connected with the California Development
Company, but it seems that he had been discussing the
possibilities of our enterprise with a New York man to whom he
introduced me. This scheme looked so favorable that I made
another arrangement with Mr. Ferguson whereby he again became
associated with the enterprise, although merely as an agent and
not in a manner that allowed him in any way to control its
future.
Nothing came of the Ferguson
negotiations in New York, but having received a communication
from Mr. Heber that he was in close touch with capital in
Chicago and advising me to come on to Chicago to help him with
his negotiations there, I suggested that Mr. Ferguson instead of
myself should go on to Chicago, as I believed that Ferguson
could possibly render Heber equally as good assistance as I, and
Ferguson desired to return West to California anyway, while at
the time I had opened negotiations with another financial
concern in New York and the outlook was such that I deemed it
inadvisable to leave.
Mr. Ferguson then went to Chicago,
but nothing came of these nego-tiations, and he proceeded to
California. It was soon after this that Mr. Heber gave up his
work with us, resigning as president of the California
Development Company, to which position I was then elected.
In the meantime I received a letter
from Mr. Ferguson, who was then in San Francisco, telling me
that he had had a long conversation with Mr. L. M. Holt and that Holt believed that George Chaffey
might be interested in the California Development Company. Mr.
Ferguson desired to go to Los Angeles and see Mr. Chaffey, and
also requested me to draft a proposition that he might make to
Chaffey.
About a year previous, in
conversation with Mr. N. W. Stowell, of Los Angeles, he informed
me that the Chaffeys (whom many people of the state had known in
connection with irrigation development around Ontario, and who
had been for several years in similar work in Australia), were
about to return to California, and that if I could interest the
Chaffeys in the Colorado Desert enterprise they would be able to
swing the financial end of the affair, even though they might
not have sufficient ready coin themselves.
On a succeeding trip to California
after this conversation with Mr. Stowell, I believe it was in
the month of May, 1899, I met Mr. George Chaffey and discussed
very carefully with him the plans of the enterprise, but didn't
approach him for financial assistance, as at that time we
believed that we were going to obtain all the funds necessary
through the agency of Tyndall & Monk, of London. Having then
already discussed the project with Mr. Chaffey, I believed that
it would be advisable for Mr. Ferguson to see him, and so wrote.
He went to Los Angeles and as a result of his interview wrote me
at New York, stating that negotiations were progressing very
favorably and that on certain conditions Chaffey had agreed to
come in, but refused to go any farther until he had talked over
matters with me. On receipt of this letter I decided to come to
California, and did so in December, 1899, and accompanied Mr.
Chaffey on a trip to the Hanlon Heading, below Yuma, and over a
portion of the Lower California end of the enterprise, but
during the trip could see very plainly that Mr. Chaffey was not
at all satisfied with the possibilities of the enterprise, due
to the apparent belief in his mind that it would be exceedingly
difficult, if not impossible, to get settlers with sufficient
rapidly to make the concern a financial success.
The only promise that I could
obtain from Chaffey was that if we could devise a scheme whereby
he could receive the assurance that 50,000 acres of the desert
land would be taken by bona fide settlers, that he would furnish
the money necessary to carry the water from the Colorado River
to these lands. I returned to San Francisco and discussed with
Mr. Ferguson and San Francisco attorneys the plan which was afterward
carried out, namely, the formation of a colonization company
which should undertake to find settlers to take up the desired
acreage under the Desert Land Act.
At my solicitation Mr. Ferguson
returned to Los Angeles to work out the details of this plan
with Mr. L. M. Holt and Chaffey, while I returned to New York to
resume again my negotiations there with the financial concern
with which I had been dealing for some time. I left with a
promise to Ferguson and other associates that I would return to
California whenever the plans which were outlined gave
reasonable assurance of success.
In March, 1900, I received a wire
jointly by Ferguson, Blaisdell and Heffernan, requesting me to
return at once to California, and stating that George Chaffey
was now sufficiently assured so that he was willing to take up
the work. Upon receiving this wire, as I had again about lost
hope in my New York negotiations, I arranged at once to close
our New York office and return to California. Upon reaching Los
Angeles, I found that Chaffey had drawn a contract that he was
willing to enter into, exceedingly short, promising but little,
and one that would tie me and the company to him. I was loath to
enter into this contract but I was at the end of my rope; all
negotiations had failed elsewhere; all of my own funds as well
as that of several of my personal friends were tied up in the
enterprise; I had not sufficient money in sight to keep up the
fight elsewhere, and as a forlorn hope and in the belief that it
would at least start something moving whether I ever got
anything out of it for myself or not, I agreed to the Chaffey
contract and signed it as president of the California
Development Company in April, 1900.
In March of this year the Imperial
Land Company had been formed for the purpose of undertaking the
colonization of the lands. It was necessary to handle the
colonization end of the enterprise either as a department of the
California Development Company or through a new organization to
be formed for that purpose. Four-fifths of the stock of the
California Development Company had been used for various
purposes, the other one-fifth of the stock, together with a
portion of the stock that had already passed to the then present
stockholders, was necessarily to be tied up in the contract with
the Chaffey's; consequently there was no stock in the California
Development Company with which to satisfy Mr. Ferguson and the new blood
that would be required to handle the land and colonization end
of the enterprise.
Mr. Chaffey at that time desired
to have nothing to do with the land and colonization end,
consequently it seemed best, in order to provide means and
capital for the handling of the land, to organize an entirely
separate company. The Imperial Land Company was then organized
and afterward entered into a contract with the California
Development Company whereby it was to make all the necessary
land surveys, do all the advertising, incur all of the expenses
of colonization, and was to receive in remuneration a certain
percentage of the gross sales to be derived from the sale of all
water stock in the United States or lands in Mexico.
It was agreed between the two
companies that the Imperial Land Company should also be allowed
to acquire and own the townsites in the Valley, and that the
work of the California Development Company should then be
confined to furnishing water.
We decided, at that time, after
mature deliberation and consultation with our attorneys, upon
the plan which we afterward followed, namely, that of the
organization of mutual water companies to which the California
Development Company would wholesale water at a given price. We
believed that for any one company to undertake to distribute
water to the individual users over such an area would be
unfeasable. In the first inception of the scheme it was proposed
to divide the entire country into water districts, although the
final plan of the mutual water companies was not worked out
until the spring of 1900.
After the signing of the Chaffey
contract in April, 1900, we were then ready to begin the field
operations, but it was necessary for me to return to New York in
May of that year to hold the annual meeting of the California
Development Company. Previous to this trip, however, I engaged
the services of Mr. C. N. Perry, who had been with me on my work
in the Yakima country in 1890, and who had accompanied me to
Yuma when I came there in September, 1892, and who had been with
me and had been largely instrumental in developing the surveys
and plans during the years 1892 and 1893, after which time Mr.
Perry had remained in Los Angeles in the office of the county
surveyor and city engineer, but at my solicitation left that
employ in order to take up again the work in the Colorado
Desert, which name we had decided to change to Imperial Valley.
Mr. Perry began his work at
Flowing Well in the middle of April, 1900, running a line from
that point south with the hope of finding sufficient government
corners of the survey of 1854-1856 to allow him to retrace the
old government lines. He was unable at this time to find any
authentic corners north of the fourth parallel, but found nearly
all of the corners of what is called the Brunt Survey, south of
the fourth parallel, which survey was made in the year 1880.
Brunt, in his notes, showed certain connections made with the
surveys of 1856 on the fourth parallel, and upon the reasonable
assumption that the sworn statement of Brunt was true, Mr. Perry
projected the lines to the north if the fourth parallel, using
as a basis the field notes for the townships north together with
the Brunt stakes found on the south. He soon discovered,
however, that something was wrong, just what he was unable to
tell. I, in the meantime, was in New York, but Mr. Ferguson
being on the ground authorized and ordered him to proceed with
the survey as then outlined, with the assurance that if anything
was wrong that a Congressional Act would afterward be obtained
to make it right.
On my return from New York in June I
had no time to devote to attempting to straighten out the
surveys of the Valley, as it was necessary for someone to
proceed at once to the City of Mexico to obtain concessions that
would allow us to commence construction in Mexico. As I was the
only one connected with the company that had any acquaintance in
Mexico, and so far had handled the Mexican business, I was the
one naturally deputized to undertake that work, and proceed at
once to the City of Mexico, returning to California in October
of that year, and in the following month, November, came to the
Valley, camping at Cameron Lake, and commenced the engineering
surveys upon which the present system of distribution is based,
and also began in December, 1900, with Mr. Thomas Beach, as
superintendent, the great work of construction of the Imperial
Canal system.
The only water in the Valley at
that time was at Blue Lake, Cameron Lake and at the Calf Holes
in New River, northwest of the townsite of Imperial. The few
teams we had were camped at Cameron Lake and, for a while, they
went from Cameron Lake, a distance of three miles, to their
work; afterward we had to haul water to the outfits in the
field, until finally the waters at Cameron Lake became so low
and so thick with fish and mud that it was impossible for stock
or man to use it. Fortunately, however, some depressions and holes, farther south, in Mexico, had been
filled up by rains, and we were able to obtain sufficient water
for stock uses from these holes.
Under the agreement entered into
with Mr. George Chaffey, he personally was under no obligation
to build the canals in the State of California. Under his
contract he was only to bring water from the Colorado River
through to the International Line, at a point east of Calexico.
Imperial Water Company Number 1 had
been formed, settlers were coming in in large numbers, and the
Imperial Land Company, under Mr. Ferguson's management, in
connection with the Mutual Water Company, was to find all of the
funds necessary for the construction of the distributary system.
Outside funds, however, were not forthcoming. The process of
lifting ourselves by our bootstraps was not entirely successful.
We were selling water stock on the basis of $8.75 a share,
payable $1.00 down, the remainder $1.00 per year, and this $1.00
had to go to the Imperial Land Company to pay for its actual
expenses in advertising and the expenses it was necessarily put
to in bringing the people into the Valley, consequently there
was nothing left for construction. Mr. Chaffey had, however,
advanced some money for this purpose and, at my earnest
solicitation, a new agreement was entered into whereby the
responsibilities for the construction of the distributary system
was taken from the Imperial Land Company and placed upon the
California Development Company.
The work that we were doing at
that time in colonization was very large. I doubt if it has ever
been equaled under any irrigation project, but with insufficient
funds for construction in sight, every share of water stock sold
increased our financial difficulties, as it necessitated the
placing of water upon lands within a given period of time, and
with no money in sight to do the work. This condition of affairs
obtained through the first four years of struggle of the
California Development Company.
Every means possible was tried,
from time to time, to bring in funds. Water stocks were sold at
a ridiculously low figure in wholesale lots to those who made
large profits therefrom. The majority of people believe that
these profits went to the California Development Company, but to
my own knowledge no stockholder in the California Development
Company has ever received one dollar in dividends, and every
dollar received by the California Development Company from the sale of water stocks
has gone directly into the construction of the canal system, and
yet, due to the fact that we were improperly financed and were
obliged continuously to make tremendous sacrifices in order to
obtain funds, the funds obtained were never sufficient to carry
on the work and to keep up with the contracts entered into for
the delivery of water.
I had, in the month of May, 1900,
just previous to my trip to New York, gained information the
truth of which I could not doubt, that led me to believe that
friction was sure to arise between Mr. Ferguson and myself and
also led me to doubt as to whether the management of the affairs
of the Imperial Land Company under him could be successful, and
if unsuccessful, I knew that the California Development Company
could not succeed. At my solicitation then, Mr. Heber met me in
Chicago on my way east and I attempted to induce him to give up
his work in Wyoming with Mr. Emerson and again join us in the
work of development of what we had now named the Imperial
Valley. This, however, Mr. Heber declined to do at the time,
stating that he was making money with Emerson, and that he would
lose financially by making a change. Later in the year, however,
in November, 1900, Mr. Heber made a visit to the coast, and as
his affairs in Wyoming were then in a condition so that he could
leave them, he decided to again become actively interested in
the development of the Valley, but didn't at that time become
connected with the management. He, however, succeeded in
bringing some Eastern money in, which materially assisted us,
and, in the spring of 1901 he joined us actively and permanently
in the work, becoming a little later the second vice-president
of the California Development Company and the general manager of
the Imperial Land Company in place of Mr. Ferguson.
In June, 1901, the Chaffeys
obtained possession of 2500 shares of the stock of the
California Development Company, and as soon as they obtained
possession of this stock they refused to go ahead with the work
under the old contract and demanded that a new contract should
be made that would give them the control of the company's stock.
We refused to accede to this and they then outlined a scheme of
a holding company into which the control of the stock should be
placed. This we also refused, but demanded that they go ahead
under their original contract. These negotiations extended over several months of time, in fact during the
entire summer if 1901.
In September of that year, my
personal relations with the Chaffeys having become somewhat
strained, I broke off negotiations with them and left for the
state of Washington to look after certain property interests I
had there, returning to Los Angeles in the latter end of
October. When I left I had given my power of attorney to Mr. E.
A. Meserve of Los Angeles granting to him the power to sign my
name to any document or contract that might be entered into with
the Chaffeys, providing only that Messrs. Heber, Blaisdell, and
Heffernan should be a unit in there desire that such a contract
should be made. On my return, to my consternation and chagrin I
found that the Delta Investment Company had been formed; that
under the contract entered into between the Delta Investment
Company and the California Development Company, the Delta
Investment Company had been appointed the financial agent of the
California Development Company, with power to buy its bonds at
50 cents on the dollar; that the assets of the Delta Investment
Company consisted solely and only of stock in the California
Development Company contributed by the Chaffeys and Heber, and
the stock of the Imperial Land Company, that through these
holdings the Delta Investment Company controlled the California
Development Company, and that the Chaffeys, controlling the
Delta Investment Company, absolutely controlled the California
Development Company; that the Delta Investment Company had also
succeeded in my absence, by simply exchanging stocks stocks, in
buying up practically all of the stock of the Imperial Land
Company. As soon as I looked over the contract, I called
together Messrs. Heber, Blaisdell and Heffernan to find out why
such a contract had been entered into, and ascertained that
neither Blaisdell nor Heffernan had paid any particular
attention to a study of the contract; they hadn't seen where it
would land them; they had not been very actively interested in
the business end of the California Development Company, but had
left their interests largely in the hands of Mr. Heber and
myself, and that in my absence they had acceded to Mr. Heber's
request that they should sign this agreement; they had believed
it was for the best interest of the company. Mr. Heber so
believed, and stated to me at the time that he had drawn the
plan of the Delta Investment Company and that he believed that
it would work out all right. I wasn't satisfied, however, and as the
after history, which was very rapidly enacted, showed my
predictions in regard to the Delta Investment Company were
correct.
My feelings toward the Chaffeys was
at this time of a nature that would hardly permit me to return
to the Valley in active charge of the construction even had Mr.
Chaffey so desired, which evidently he did not, as he himself
took the title of chief engineer and made his headquarters at
Calexico during the winter of 1901 and 1902, and assumed direct
charge of construction. Money was immediately forthcoming for
construction purposes, but money through the Delta Investment
Company cost the California Development Company $2.00 for every
dollar that it obtained, and I soon saw the end unless something
was done.
I did not enter into negotiations
with the Chaffeys at that time, but, using Mr. Heber as an
intermediary, I notified the Chaffeys that unless things were
put in a different shape immediately that the whole matter would
be thrown into the courts, although I foresaw that this would
necessarily stop the work of development of the Valley. But I
had not only the interest of the settlers of the Valley to look
out for, but I considered even as a prior and superior lien upon
my efforts the interest of the stockholders who had invested
their money in the California Development Company through me.
The final result of this action was that negotiations were
opened with the Chaffeys for the purchase of their interests in
the company, resulting in the elimination of the Chaffeys from
the management of the company in February, 1902.
Before this purchase was
consummated, however, and the management of affairs turned back
to its original owners, the Chaffeys, who were in control of the
California Development Company and in control of the board of
the Delta Investment Company, passed certain resolutions and
made certain transfers that took from the California Development
Company all of its bonds and a very large portion of its notes
and mortgages, and in order to carry through the purchase we
were not only paid over to the Chaffeys, in addition to all of
the securities of the company which they had taken, the sum of
$25,000 in cash, raised not by the company but by the individual
stockholders in the company, and in addition we gave them our
note for $100,000, secured by a majority of stock in the
California Development Company.
We started out then, about
the first of March, 1902, with our bonds all gone, our
mortgages largely depleted, not a dollar in the treasury,
and individually so deeply in debt to the Chaffeys that it
was exceedingly doubtful whether we would ever be able to
pull out.
We, however, took over the
management of the enterprise and in order to provide funds
for construction we succeeded in borrowing $25,000 from the
First National Bank of Los Angeles, and I again took charge
of construction.
In the deal made with the
Chaffeys and the Delta Investment Company, at this time,
their personal interest in the stock of the California
Development Company and of the Imperial Land Company was
purchased by Heber, Blaisdell, Heffernan and Rockwood, of
the old guard, and by Messrs. F. C. Paulin, J. W. Oakley and
H. C. Oakley, who had been very active as outside agents
under the Imperial Land Company, and who at this time became
directly interested with us as owners of one-half of the
stock of the Imperial Land Company, and of a smaller
percentage of the stock of the California Development
Company. Mr. Paulin became the manager of the Imperial Land
Company, Mr. Heber being its president as well as president
of the California Development Company.
As I said in a previous
paragraph, under the agreement entered into by the Imperial
Land Company and the California Development Company, the
Imperial Land Company was to have the townsites in the
Valley, the California Development Company restricting its
activities to furnishing water to the lands. It may be of
interest to know something regarding the townsites and why
they came to be placed in the locations which they now
occupy.
On my return from the City of
Mexico in October, 1900, I found that the then manager of
the Imperial Land Company, Mr. S. W. Ferguson had selected
for the site of what we intended to be the central town of
the Valley, the lands now occupied by the town of Imperial.
It had been decided before that this town, when laid out,
should be given the name of Imperial, corresponding to the
name that we had given to the Valley. Personally, I objected
very seriously to the location that had been selected for
two reasons, first, that the character of the soil was of
such nature that it would be difficult to produce the
flowers and shrubbery which residents of the Valley would
naturally desire to put about their homes; second, I knew
that any branch road reaching Imperial from the main line of
the Southern Pacific track would necessarily pass for
several miles north of the town through a country that for
years would remain undeveloped. I refer here especially to
the rough and salt lands between Imperial and Brawley. I
knew that in as much as all strangers coming into the Valley
would pass over this land that the impression must be a bad
one, and for these two reasons I urged that as not more than
twenty lots had been sold at that time in the proposed new
townsite, that it should be moved to a location which would
have placed it one and a half miles north of what is now the
town of El Centro. Had this been done at the time the
opportunity would never have existed for a competitive town
in the neighborhood of Imperial. The railroad would have
been thrown farther to the east, coming through the highly
cultivated area in the Mesquite Bottom, and the factional
strifes and difficulties which have arisen through the
establishment of El Centro would never have existed, and
instead of two fighting communities in the center of the
Valley today, we would probably have a town of between three
and four thousand people that would now be recognized by the
outside world as one of the coming cities of California, and
the bitterness engendered by the establishment of El Centro
would have been obviated.
The town of Silsbee was
selected on account of its location on the shore of Blue
Lake, which previous to the overflow of the Colorado River
gave the opportunity for the establishment of a very
beautiful town and resort in the Valley. The town was given
its name from the original owner of the lands, Thomas
Silsbee.
(continued)