USA > California > A history of the new California, its resources and people; Vol I > Part 18
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Photo by Taber
CHINATOWN -SAN FRANCISCO
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they were personally liable. Their equity in the road was represented by their stock, but this stock could not have been sold for one-third enough to pay off their personal unsecured obligations. It was shown before the Senate committee that after the consolidations the Crockers sold all their stock to their associates at thirteen cents on the dollar, and on credit at that. That later, these associates had to return this stock, because they were un- able to carry it. That still later, Huntington, Hopkins and the Crocker brothers offered on the market all the stock they held for twenty cents on the dollar, and no one would buy. "It was not until about 1880 that the stock had a market value, but it then represented not the aided lines, but all the valuable property, branch lines and terminals which the directors had brought in, which constituted, on the basis of its earnings, two-thirds of the value of the whole system." In the testimony gathered by the government, a witness said that "at the time this aided line was consolidated" with other and more valuable lines, "there was no one who would touch a share of the Central Pacific stock if he had to pay for it."
The general public knew little of the peril in which these men stood for years. The Union Pacific was forced into the hands of receivers in 1893, being burdened with obligations in excess of its earning capacity, and only the wisest generalship, by one of the greatest railroad managers, saved the Central Pacific from a like fate. The creation of the Southern Pacific was in absolute terms the largest achievement of Mr. Huntington and his asso- ciates, but it was born of necessity and not of greed. The project of a road through Texas to the coast aided by large grants had to be blocked or be- come a menace to the Central Pacific. The Northern Pacific and the Oregon Short Line on the north, and the Texas road on the south would have de- prived the Central Company of a large part of its through business and destroyed the road. The Coast Line lay unfinished,-a great gap in it mid- way-because all the resources of the company had been expended in block- ing the Texas Pacific and getting control of the business of southern Cali- fornia, the southwest and the south, but this business saved the original line. It was out of the new properties which the directors had created and not out of the aided line that two-thirds of the dividends of nineteen years was earned. The original Central Pacific was not quite "as unproductive as a bridge," but if no other lines had been created by the management they
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would have been thrown into bankruptcy. They were enabled to create the Southern Pacific-the greatest transportation system in the world-because they had built successfully, out of weakness and in the face of enormous dif- ficulties, the Central Pacific, and had reputation and credit as well as ex- perience, skill, and iron will. Of all their assets "their credit alone was available, and that alone bridged the chasm of bankruptcy open before them."
THE SOUTHERN PACIFIC AND CALIFORNIA.
It was a thorn in the side of fools that "the Railroad" should "go into politics." No doubt some evil was wrought. The railroad was there to fight fire with fire. It was there for self-protection. That is a law of na- ture which, the principle, "turn the other cheek also," will never supersede. What are the facts? They are stated briefly and forcibly by John P. Irish, -who is not and never has been in the service of the company. "Cali- fornia's new constitution issued out of the Sand Lot period, and was the product of a spiteful attack upon property, a mixture of statute and stump speech. It made two provisions which gave the railroad the chance of go- ing into politics or going into bankruptcy." These two provisions were a State Board of Equalization and a Railroad Commission. The first had authority to assess railroad property without notice and without appeal, and the second was empowered to fix transportation rates, and in all controversies, civil or criminal, its decisions were to be deemed conclusive, just and reason- able. These committees were made elective by the people and at once you had the evils of politics thrust into the private business of a corporation. It does not matter that this corporation held the relations of a common carrier to the public. The aim of the Railway Commission from the first has been to determine the profit which capital should derive from an investment, and the courts have always held that neither Congress nor state constitutions, nor any committee under either can exercise any arbitrary or despotic pow- er. To fix rates and decide upon their justice, and so limit arbitrarily the earning power of money legitimately invested, is opposed to the supreme law of the land which guarantees to every man and every corporation the right to manage its own business.
"The Railroad" did not go into politics. It was thrust in. The state had devised "a process of raising taxes and reducing income" and on the
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point of this echelon, to use Mr. Irish's military figure, the railroad was in danger of being impaled. It needs no special insight to see that at the angle of contact where the two processes approach a common point, lies bankruptcy, and "politics" for the imperiled company was simply self-de- fensive.
California, it was said again and again, should have ten millions of people. The inference was the railroad rates kept them out. But how many of the states have one-half of ten millions? Production and wealth in California have increased with railroad mileage, and if we have occasion to- day, in contrast with the past, to recognize a New California, we owe it to the courage, the faith, the energy and wisdom of the men who organized the Central Pacific. Commerce, agriculture, business of all kinds, the in- crease of population, the growth of morals waited upon the coming of the first trans-continental road, and the growth of property values has been enhanced by every mile of track laid on the coast and in the interior valleys. Practically the United States is twice as large as it was, and California, that would have halted in spite of its charms and the bounty of its fields, is to- day one of the richest sections of the Union and with the promise of the densest population. This promise is based upon the fertility of the soil and the beneficence of the climate. Irrigation is to be the chief feature of the agricultural life of the state, and this means an era of small farms and intensive culture. It means a population as dense as that of Italy.
Men have been slow to see the splendid promise of the country-side of California. They did not in the days of the padres, when Mexico gave away the land by leagues. Nor did they when the mines began to fail and they turned to the soil for subsistence. Even the railroad people did not appre- ciate the worth of California soil. When the Central Pacific was offered the land grant of the Western Pacific, which covered part of the Upper San Joaquin Valley, they declined it. It was offered for $100,000.00 and was actually worth millions, but in that day it was considered valueless.
So in "the eighties," when southern California broke out in orchards, and land in the lifetime of a child sold for a thousand dollars an acre that, before water was turned on it, was a part of the desert, central California remained undiscovered and the rich Sacramento Valley continued to grow wheat, men not seeing the magnificent future that was opening even then.
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But now all this is changed. It is a new day. The general government is behind the great movement to water the arid lands of the west, and under this stimulus the great sunny plains of California are to double and treble population and production. The natural conditions make it the fairest of all the farming regions of the world. And as if anticipating the coming greatness of the state, its pioneer railroad builders have provided an al- most unrivalled system of transportation. They built costly roads in ad- vance of population. If they occupied the best ground for railroads that was only natural sagacity. The man who would not do likewise has not ability to serve himself and will only make a mark in the dust. But back of this business foresight, this common sense, was the conviction that California would draw to herself a great population, develop her vast resources, and become one of the great states of the Union. And they cherished this prophetic anticipation to the last, cherished it when there were not half a dozen peo- ple to the square mile, held fast to it while development lagged, and long lines of road ran through homeless tracts, and they died, like Moses upon Pisgah, seeing the Promised Land only from afar, but seeing it, and never doubting the coming greatness of the land they served and loved.
Was it self-interest which moved them? Doubtless. It is the great mainspring of human life. But he who uses his powers honestly and to the utmost, can hardly help serving others; and certainly between the rail- road builder and the state there is community of interest. What gives rail- ways their value? The fact that they are public highways, indispensable means of inter-communication. They enhance the value of all property ; they make markets accessible; they promote the settlement of the country; they develop the waste places, and the very deserts disappear from the map. This in turn increases the value of the railroad; every business house, ev- ery orchard and farm, every orange grove and field of grain and green meadow, every canal and irrigating ditch helps to increase the income of the transportation company, so that the wealth of the state is in its railroads, and the wealth of the railroads is in the developed and populous state. It is in its source and origin common wealth. This cannot be emphasized too strongly in this state. If California had been Greenland, would the Cen- tral Pacific have been built? If it had been less rich in its climate, less inviting in its fertile plains and valleys, would even the courage of these
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men have faced the mountains and the alkali plains beyond? California ex- plains the railroads, attracted them, made them possible as a business propo- sition. It was California's promise, the glory shining on its broad valleys, the Gospel of Farms and Homes preached by the Sunshine and the fat- ness of its fields, that led to the laying of the first rails, and was the inspira- tion which sustained the courage and produced the money which started the highway of steel over the frowning Sierras.
There are railroads and railroads. They have their distinctive history, and back of them their own personality. They are pioneers and . they are inheritors of other men's labors. They are in advance of population, and are at the beginnings of growth and development, and they come in when the struggles of the earlier years are past, and share in the prosperity which comes with population and developed resources.
The Central Pacific belongs to the first of these classes. It was here when the state was young. It was here in advance of the people. It was here before way business was profitable, when few were seeking homes in California and travel across the continent was limited. Now this land be- yond the west, once remote, isolated, unknown-a land of dreams out of which strayed tales of incredible richness, of perfect climate and glorious scenery, has been made the world's neighbor, and tourists have found a new playground, artists a new beauty, and farmers a land of comfort, while California fruit, California wheat, and wine, and oil, go to feed half the countries of Europe. The Central Pacific has to all intents and purposes doubled the area of the United States, and the nation is richer today, and California more desirable for residence, because the men who planned and executed the great enterprise, fought their battle successfully in the face of envy and detraction. There are two classes of people, capitalists and those who want to be capitalists. Any man is at liberty to attempt a voyage on the River Pactolus if he think he can paddle his own canoe, and keep his head in the rapids. These men did, and we are all richer for their success, not only in our personal holdings, but in our ethical standards. The air is clearer today than when these men were here in the dust and smoke of the struggling rivalries of life, and our eyes are not blinded as once by the mists of passion and prejudice. The whole railroad management of the country is nobler, cleaner, more dignified because of the history of the first
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trans-continental road. Principles have been evolved in the hard school of experience. Wall Street itself testifies that "the railroad president" now finds "pride in acting fairly by his stockholders and directors." and Cali- fornia is honored by the integrity of the men who built railroads, but never wrecked them, who found California a mining camp and left it a common- wealth, rich in a thousand developed resources.
Photo by Taber
ORANGE GROVE, LOS ANGELES
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CHAPTER XII.
TWENTY YEARS OF IRRIGATION IN CALIFORNIA.
THE STORY OF THE GREAT FIGHT FOR A SYSTEM OF IRRIGATION TO MAKE LANDS VALUABLE READS LIKE A CHAPTER FROM THE ARABIAN NIGHTS-TROUBLES IN THE WAY OF THOSE DESIRING TO RECLAIM LANDS UNFIT FOR USE BECAUSE OF LACK OF WATER-THE PROBLEMS OF LEGISLATORS-HOW THE FIGHT FOR A GOOD LAW WAS WON, BUT NOT UNTIL MUCH BITTERNESS AND MANY APPEALS HAD BEEN TAKEN FROM LOWER COURTS.
In the year 1884 a great legal war was being waged over the respective rights of riparian proprietors and those who sought to divert the water from the natural streams and apply the waters so diverted to irrigation. The agitation of this question finally culminated in the case entitled "Lux vs. Haggin," in the supreme court of this state. The question there presented was, as stated by that court, "Can a private corporation divert the waters of a watercourse and thereby deprive the riparian proprietors of all use of the same, without compensation made or tendered to such proprietors?" and the court held in answer to this question :
First: That the owners of land by or through which a watercourse naturally and usually flows have a right of property in the waters of the stream.
Second: This property may be taken for a public use, just compensa- . tion being first made, or paid into court.
Water to supply "farming neighborhoods" is a public use, and it is for the legislature to determine whether, in the exercise of the power of eminent domain, it was necessary or expedient to provide further legal ma- chinery for the appropriation (on due compensation) of private rights to the flow of running streams and distribution of the waters thereof to public uses.
Third : But one private person cannot take property from another,
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either for the use of the taker or for an alleged public use, without any com- pensation made or tendered.
Fourth: Riparian owners may reasonably use waters of a stream for purposes of irrigation.
By the foregoing decision on riparian rights it was thought that irri- gation interests in California had severely suffered, and the best thought of the state was directed to some solution of the problem as to how waters needed for irrigation purposes might be diverted and appropriated for irri- gation purposes. Such was the legal situation.
The contestants in the above entitled case, however, subsequent to the rendition of the foregoing decision, settled all their differences by comprom- ise, which rendered any further controversy between them unlikely. The respective sides had represented contending forces, and when the plaintiffs and defendants in that case had settled their differences, those whom they had so represented respectively were at a loss to know what course to pur- sue in the premises. The right of the private corporation or other land owner to divert the waters of a watercourse for irrigation purposes had, by the above decision, been denied. The statutes prior to this time had appar- ently fully authorized such diversion. A title of our Civil Code provided that the right to the use of running water flowing in a river or stream might be acquired by appropriation, provided that the appropriations were for use- ful or beneficial purposes.
The simple process by which this diversion might be made consisted in the requirement that a notice of appropriation should be posted in a con- spicuous place at the point of intended diversion, and that the claimant should state therein the amount of water claimed by him; the purposes for which he claimed it, and the place of the intended use: the means by which he intended to divert it, and the size of flume, ditch, pipe or acqueduct in which he intended to divert it, and that a copy of the notice must, within ten days after being posted, be recorded in the office of the recorder of the county in which it was posted.
After taking these preliminary steps, the claimant was required to com- mence work within sixty days, which work he was required to prosecute diligently and uninterruptedly to completion, unless temporarily interrupted by snows or rain.
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It had been thought, prior to the decision of the case of Lux vs. Hag- gin, that these provisions of the statute authorized the appropriation of wa- ter for irrigation purposes in California, and that the doctrine of riparian rights, as defined in said case, had no existence. The future welfare of the state depended upon the right to use all available water for irrigation purposes. The right to have the water flow in its accustomed channel to the sea, according to the common-law doctrine, it was thought, did not exist. In fact, it had become the commonly accepted belief in California that the statutory enactments to which I have called attention, were sufficient author- ity for the diversion and use of the waters of any stream as against any and all riparian claims. But this decision put a new phase upon the irriga- tion situation.
Many important irrigation enterprises had been launched ; large canals and other works essential for the diversion of water had been constructed in various portions of the state. In many instances these systems had been operated for a sufficient length of time before this decision was announced as to have acquired a right to the use of the water theretofore diverted by them by prescription, or statute of limitations. Some of the largest irriga- tion systems of the state were so protected. But while vast amounts of money had been expended in the building up of such systems, the area cov- ered by the water supplied by them was insignificant when compared with the entire area requiring irrigation. It might be safely said that not one- twentieth part of the irrigable land in California had been supplied with water for irrigation purposes at the time this decision was announced. When we speak of irrigable land, we mean lands that were scarcely worth having unless supplied with water for irrigation. Such is the character of the land throughout the great San Joaquin Valley, except in favored spots lying along the bottoms of certain rivers. The same may be said of the lands in the Sacra- mento Valley, which are for the most part of little value in their natural state.
The conditions in southern California were even worse, because the lands in that locality are more desert-like in character than are those in the San Joaquin and Sacramento valleys. California was essentially an irrigation state. Its lands were scarcely worth the government price unless they could be supplied with water for irrigation. It is true that the coast lands, such
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as are found in portions of Ventura, San Luis Obispo, Santa Cruz, Santa Clara, Napa and Mendocino counties, do not in general require water for ir- rigation. The rainfall in these localities is generally in excess of the rainfall in the interior, and the added dampness by reason of proximity to the sea renders them reasonably profitable for agricultural purposes without the artificial use of water for irrigation, but the great preponderance in area was situated as above noted. How this might be supplied with irrigation, within the requirements of the decision of Lux vs. Haggin, was a problem to be met.
The court had decided, as we have seen, that "farming neighborhoods" were entitled to exercise the right of eminent domain. In other words, that water to supply "farming neighborhoods" was a public use, and that this public use authorized the invocation of the right of eminent domain. But how should this be accomplished? The "farming neighborhoods" consisted of an aggregation of farmers, each of whom was a private individual, and whose interests were separate and distinct from those of his neighbor, and a single farmer was not authorized to join with his neighbors in a common cause of action because their interests were distinct and separate and there- fore the exercise of the right of eminent domain did not lie within the reach of either the single farmer or of the many farmers.
The court, it will also be seen, had significantly suggested that it was for the legislature to determine whether, in the exercise of the power of emi- nent domain, it was necessary or expedient to provide further legal machinery for the appropriation (on due compensation) of private rights to the flow of running streams and the distribution of water thereof to public uses. No other recourse seemed possible under this decision than the organization of these "farming neighborhoods" into public corporations, having the semblance of municipalities who would thereby become possessed of the right of emi- nent domain in behalf of any interest which they, as such public corporations, might have.
When the legislature of 1887 met such was the existing condition. Vast areas of land in the San Joaquin Valley which might be made exceedingly profitable with irrigation were without the needed supply, and without the means of acquiring it. It was absolutely beyond their reach for the reason that any attempt to take it from the streams would be met by riparian claims,
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and it was beyond their reach for the further reason in many instances that an organization could not be perfected which would be sufficiently powerful to command the funds with which to construct needed works. Such being the situation, the irrigation district law of California was suggested as a so- lution of the problem. It afforded to the farming neighborhoods the oppor- tunity of organizing themselves into public corporations wherever the need might exist, and of uniting to the end that they might divert the waters of any stream to supply their lands with needed irrigation.
Inasmuch as this was the first attempt to meet the situation under the decision of Lux vs. Haggin, it will be interesting to note what the features of this act are, and some of the efforts that were made to apply it, and with what success.
THE IRRIGATION DISTRICT LAW OF 1887.
As a means of availing themselves of the provisions of the district law, a "farming neighborhood" might present to the board of supervisors of a county a petition signed by not less than fifty freeholders who should be own- ers of land susceptible of one mode of irrigation, from a common source, and by the same system of works.
It was required that this petition, together with a notice of its presen- tation to said board, should be published for at least two weeks before the time of its presentation, and that it should set forth and particularly describe the boundaries of the proposed district, and should contain a prayer that the same might be organized into a district, under the provisions of said act. It was also required that the petitioners should accompany the petition by a good and sufficient bond to be approved by the board of supervisors, in double the amount of the probable cost of organizing such district, condi- tioned that the petitioners would pay all such costs in case such organiza- tion should be effected.
This provision was of the greatest importance. The object of it was to empower the board of supervisors, whenever a petition might be presented to them, to employ all necessary engineering talent to determine the feasibility of the district asked for; as to whether it had an ample water supply; as to whether the lands were so situated that the entire area would be benefited by irrigation; whether the cost of the system would be such as the land
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