USA > California > Imperial County > The history of Imperial County, California > Part 11
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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 posses- sion 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 Colo- rado 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
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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 va- rious 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 arrive when I could take that work up. I be- lieved that that time would come as soon as the option held by the Glas- gow people had expired on the Andrade lands.
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 em- ployed in technical engineering work. I had not come in contact with the business world nor with business men and I felt that it was neces- sary 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 imme- diately 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 had 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 of 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 fi- nance if the water, instead of being taken out at the Pot Holes, should be
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taken from the Colorado River on the property of Hall Hanlon, imme- diately 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 car- ried on the work of promotion. To Dr. Heffernan, his steadfast friend- ship for me personally, and to his faith in the ultimate outcome of the enterprise, I believe is largely due the success which afterwards accom- panied 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 differ- ent. 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 weak- ness 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 but one reason that might prevent him
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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 enter- prise was not of such a magnitude but what he might lose it without crippling himself, that his pride was wrapped up in its success. After- ward, I think in August of that year, Mr. Hubbard met me in Los An- geles and said that he had decided to take up the Bear Valley propo- sition 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 it 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 af- terward to myself, that the real reason for his 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. Fer- guson and had made him the manager, and from his knowledge of Mr. Ferguson's management of the Kern County Land Company, he decid- ed that he did not care to be connected with him. In answer to my ques- tion 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 noth- ing 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 fu- ture, but no connection was made with him then. Afterward, in Novem- ber, 1895, both Mr. Ferguson and I went to Chicago, and after remain- ing there for a few days, Mr. Ferguson went to New York, while I re- mained in Chicago to get out the first prospectus maps which were being printed for us by Rand-MacNally.
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
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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 se- curing funds, we decided to have Mr. Heber join us. Heber's connec- tion 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 Colo- rado 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) attor- ney 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 organiza- tion 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 organ- ized during my absence, Mr. Heber being made president. Neither Mr. Ferguson nor Mr. James H. Beatty, who at that time was an equal partner with Ferguson and myself, was made a director of the com- pany, nor was I, for the reason that all the properties which we had ac- quired 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 divid- ed 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 be-
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came 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 word 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 Im- perial. These men were very 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 forthcoming, 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 ac- count in largely depleting our 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 elimin- ated. I found this purchaser in Mr. Blaisdell, who succeeded in raising
4
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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 the 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, pro- viding that the report of the engineer he should send to make an exam- ination was entirely satisfactory. The specific agreement at that time was that if the report of his engineer disputed any of the material state- ments 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 de- sired 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, suc- ceeded 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 re- duced our option from 350,000 acres of land to the 100,000 acres after- ward purchased by the company.
While in California, I received a telegram from Mr. Blaisdell that Mr. George W. Anderson of Denver, the engineer selected by Mr. Forbes to examine the project, would meet me 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 re- turned to Denverwhile I proceeded to the City of Mexico to put up a few fences there that were somewhat broken down, and returned from the
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City of Mexico direct to New York in November, 1896, expecting, of course, as I knew the enthusiasm of Mr. Anderson over the project, that all 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 enter- prise ; 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 state- ment, 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, consist- ing 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 at- tempted to find out the name of Mr. Forbes' San Diego correspondent. I have been trying all 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 ty- phoid 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
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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 in- vestor, 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 enter- prises 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 Kan- sas, and to whom Mr. Heber had given me letters of introduction. These gentlemen became so much interested in the proposition that, al- though I decided for several reasons to return to America, I left them working on it. Afterwards we received communications from them that Ied both Mr. Heber and myself to believe that the money could be se- cured through this source, but in the meantime I had opened negotia- tions 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 re- ports 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."
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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, believ- ing 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 ne- gotiations 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 enter- prise, 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 agree- ment, 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 imme- diately 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 de- clared 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 Mexi- can 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 posi- tion of the California Development Company stronger as against any actions in the courts of the United States. As a matter of fact, this
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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 govern- ment 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 gen- eral positively refused not only to grant my extension on the old con- tract, 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 pro- duce. I attempted to argue with the general that he was working against his own interests, but it seemed he had lost entire confidence in the abil- ity of myself and associates to carry through the enterprise and seemed to be absolutely fixed in his determination to grant no further conces- sions. As I knew, however, that our ability to carry through the enter- prise 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 enter- prise, 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.
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