USA > California > Imperial County > The history of Imperial County, California > Part 12
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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 for London.
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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 Novem- ber of that year and I followed in December in order to perfect certain details in California that were necessary for the assurance of the pro- posed English investors.
We supposed that everything was assured, but for some reason that I have 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 Amer- ica.
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 neigh- borhood, 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-sacri- ficing 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 ob- tained 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 suc-
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cessful, and just at this time I received a telegram from Ford & Com- pany, bankers of Boston, asking me if I would go to Porto Rico to re- port upon a sugar proposition which they owned there. They had de- cided 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 arrange- ments 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 de- cided to remain a couple of days 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 of the main living room. I was awakened about three o'clock in the morning by the rock- ing 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 hur- ricane that had visited the islands for a period of over two hundred
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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 Califor- nia 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 in- jured 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 irri- gation enterprise.
On my arrival in New York, I found that Mr. Heber was still in Chi- cago and that our New York office was being used by Mr. S. W. Fer- guson, 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 be- came 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 hav- ing 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 in- stead of myself should go on to Chicago, as I believed that Ferguson could possibly render Heber equally as good assistance as I, and Fer- guson 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
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with Mr. L. M. Holt and that Holt believed' that George Chaffey might be interested in the California Development Company. Mr. Fer- guson desired to go to Los Angeles and see Mr. Chaffey, and also re- quested 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 Aus- tralia), 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 enter- prise, 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 al- ready 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 rapidity 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 Colo- rado River to these lands. I returned to San Francisco and discussed
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with Mr. Ferguson and San Francisco attorneys the plan which was afterward carried out, namely, the formation of a colonization com- pany 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 as- surance 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 pur- poses, 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 ; consequent- ly there was no stock in the California Development Company with
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which to satisfy Mr. Ferguson and the new blood that would be re- quired 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 of 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, name- ly, 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 unfeasible. 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 of 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.
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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 suf- ficient 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 of 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 Con- gressional Act would afterward be obtained to make it right.
On my return from New York in June I had no time to devote to at- tempting to straighten out the surveys of the Valley, as it was neces- sary 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 ac- quaintance in Mexico, and so far had handled the Mexican business, I was the one naturally deputized to undertake that work, and proceeded 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.
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Fortunately, however, some depressions and holes, farther south, in Mexico, had been filled up by rains, and we were able to obtain suffi- cient water for stock uses from these holes.
Under the agreement entered into with Mr. George Chaffey, he per- sonally was under no obligation to build the canals in the State of Cali- fornia. Under his contract he was only to bring water from the Colora- do River through to the International Line, at a point east of Calexico.
Imperial Water Company Number I 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 Com- pany, was to find all of the funds necessary for the construction of the distributary system. Outside funds, however, were not forthcom- ing. 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 construc- tion. 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 be- lieve that these profits went to the California Development Company, but to my own knowledge no stockholder in the California Develop- ment Company has ever received one dollar in dividends, and every
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dollar received by the California Development Company from the sale of water stocks has gone directly into the construction of the canal sys- tem, 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 Chi- cago 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 de- velopment of what we had now named the Imperial Valley. This, how- ever, 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 ac- tively 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 De- velopment 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 ob- tained 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 to 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 con-
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tract. These negotiations extended over several months of time, in fact during the entire summer of 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 in- terests I had there, returning to Los Angeles in the latter end of Octo- ber. 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 their 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 be- tween the Delta Investment Company and the California Development Company, the Delta Investment Company had been appointed the finan- cial agent of the California Development Company, with power to buy its bonds at 50 cents on the dollar, with power to buy in all of its mort- gages at 50 cents on the dollar ; that the assets of the Delta Investment Company consisted solely and only of stock in the California Develop- ment 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, ab- solutely controlled the California Development Company ; that the Del- ta Investment Company had also succeeded in my absence, by simply exchanging stocks, in buying up practically all of the stock of the Im- perial 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 con- tract ; they hadn't seen where it would land them; they had not been very actively interested in the business end of the California Develop- ment 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 In-
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