! 0! 4 1 ::ndro Irricv.: .ic -let UNIVERSITY OF CALIFORNIA AT LOS ANGELES ROBERT ERNEST COWAN I ALESSANDRO IRRIGATION DISTRICT, California : Its Physical, Engineering and Business Problems ^ Conditions, WM. HAM. HALL. Its Legal Status, WILSON & WILSON, BACON & COMPANY, SAN FRANCISCO Printers. October, 1891. ALESSANDRO IRRIGATION DISTRICT, California : Its Physical, Engineering and Business Problems ^ Conditions, WM. HAM. HALL. Its Legal Status, WILSON & WILSON. BACON & COMPANY SAN FRANCISCO, Printers. October, 1891. Introduction. INTRODUCTION. With the multiplication of Irrigation Districts in California, all equally authorized by law to issue and sell bonds, came the necessity at financial centers for definite and authentic infor- mation, well arranged and presented, concerning each. The bankers of San Francisco, to whose judgment and opinion con- stant appeal was being made by contemplating bond purchasers and financial agents abroad, and who were daily being applied to for information about these districts and their securities, could not take the time, or incur the expense for, or assume the entire responsibility of, the examinations needed to get at the facts on which to base their judgments, or from which to- enlighten their correspondents. This condition of affairs was proving a serious drawback to \ placing the district securities. It had to be remedied. A \ number of representative Irrigationists came to San Francisco, = and the subjoined correspondence was the practical result of 5 many meetings and interviews with representative bankers. The engineer's reports and the attorneys ' opinion consequent \ upon this action are designed for the information of financial | agents and contemplating investors in the securities of districts, and have not been sought as promotion papers in the interests of districts. Necessarily, some district enterprises are good from the business and engineering standpoint, and will be so spoken of. It may be that some are bad, and, if so, it is ex- pected they will be thus reported. J. W. NANCE, President State Association of Irrigation Districts. 298958 Alessandro Irrigation District. CORRESPONDENCE WITH LEADING FINANCIERS OF SAN FRANCISCO. PALACE HOTEL, SAN FRANCISCO, June 12, 1891. THOMAS BROWN, ESQ., IGNATZ STEINHART, ESQ., LLOYD TEVIS, ESQ., A. MONTPELLIER, ESQ., R. C. WOOLWORTH, ESQ., And others. GENTLEMEN : In their endeavors to establish credit before the financial world, the Irrigation District authorities in this State have come to realize the necessity for having the several district schemes and organizations reported upon by experts whose qualifications and good standing would be vouched for by those persons controlling financial matters in San Francisco the recognized center of business and money for California. Each district has had its engineers and its attorneys, in whom the respective district authorities have all due confi- dence ; but the districts are many, and the experts of engineer- ing who have participated in the work are several for each district. The advisability of centering upon some one engineer to re- view the labors of the many heretofore engaged, for the in- formation of the financial public, suggested by yourselves to several district representatives a short while ago, has been brought home to the district authorities. Speaking for many with whom I have communicated, they generally see it, and ap- prove of it. Correspondence. 5 Now, in order to expedite matters, and to be able to suggest to the several District Boards some definite line of action, and lay before them the name of an engineer whom you and other controllers of local financial sentiment will recognize as of good professional and personal standing, I, as President of the As- sociation of Irrigation Districts, profiting by the personal inter- views had with you by representatives of our districts, address you the following inquiry : In case the respective Boards of Directors of Irrigation Dis- tricts in this State employ Mr. Wm. Ham. Hall, consulting engineer, to report on the questions of water supply, plans and estimates for works, suitability of lands, and generally the physical, engineering and business questions involved in each district scheme, giving him all desired latitude for thorough- ness of work, will you thereafter, when in the course of busi- ness you are applied to for information concerning the standing of such district, reply that its affairs have been examined by an engineer competent, in your opinion, for the task, and familiar with the subject in this State, and a man whom you believe to be trustworthy for the service ; in other words, that, in your opinion, he is an engineer on whose reports careful investors may rely as much as on those of any engineer in this line of business ? Very respectfully yours, President State Association of Irrigation Districts. ToJ. W. NANCE, ESQ., President State Association Irrigation Districts. SIR: We have read your foregoing letter of June 12, 1891, and we hereby answer in the affirmative relative to the inquiries re- specting Mr. Hall. 6 Alessandro Irrigation District. In this connection we would suggest that it might be well for your Association to employ some competent attorney to in- vestigate the status of the several districts, and assist Mr. Hall in his work. Respectfully yours, Correspondence, NOTE. As will be seen, the above represent personal signatures. The gentlemen were addressed individually, and not as presidents and man- agers of banks ; and so, in replying, they signed for themselves and not for the banks. But in order that the value of this certificate may be known to those persons not familiar with San Francisco banking organ- ization, the following memorandum of identification is appended ; MR. THOMAS BROWN is Cashier and Manager of the Bank of California. MR. LI.OYD TEVIS is President and Manager of the Bank of Wells, Fargo & Co. MR. IGNATZ STEINHART is the Manager of the Anglo-Californian Bank. MR. A. MONTPELUER is Cashier and Manager of the Grangers' Bank of California. MR. R. C. WOOI,\VORTH is President and Manager of the Crocker- Woolworth Bank. MR. I. W. HEI^MAN is President and Manager of the Nevada Bank of California. MR. ROBERT J. TOBIN is Secretary and Manager of the Hibernia Sav- ings and Loan Society. MR. L. GoTTiG is President and Manager of the German Savings and Loan Society. MR. JAMES G. FAIR is President of the Mutual Savings Bank. 8 Alessandro Irrigation District. MR. S. P. YOUNG is Secretary and Manager of the California Safe Deposit and Trust Co. MR. ALBERT MILLER is President and Manager of the San Francisco Savings Union. MR. DANIEL MEYER is an individual Banker, and extensive Dealer in Securities. Letter of Transmitted. LETTER OF TRANSMITTAL. SAN FRANCISCO, CAL., Oct. ist, 1891. MR. J. W. NANCE, President State Association, Irrigation Districts, SIR: In compliance with your request, and by authority of a reso- lution passed by the Board of Directors of the Alessandro Irrigation District on August 4th, last past, I herewith submit to you a report ' ' on the questions of water-supply, plans and estimates for works, suitability of lands for irrigation, and generally the engineering and business questions involved in the construction of the works ' ' for the Allesandro Irrigation District, in this State. Very respectfully yours, WM. HAM. HAIvL, Consulting Civil Engineer^ Ales-andro Irrigation Dtstrut. CONTENTS OF ENGINEER'S REPORT. DIVISIONS OF THE SUBJECT. 1. Alessandro Irrigation District. 2. Adaptability to Irrigation. 3. Necessity for Irrigation. 4. Water Supply. 5. Water Duty and Delivery. 6. Works and Cots. 7. District Valuation. 8. BondeH Indebtedness. 9. Present Financial Condition. 10. Future Financial Outlook. 11. Additional Bond Issue. 12. Right-of-Way Matters. 13. Contracts and Contract Rates. 14. Cost of this Irrigation. 15. Character of this Work. 16. Condition of the Work. 17. Probable Irrigation Effect. 18. Litigation and Local Sentiment. 19. Conclusion. LIST OF EXHIBITS. I. Cost Statement B. V. I. Co. Work (Eng'r in Chg.) II. Bond Redemption Illustration. III. Financial Statement (Treasurer). IV. Assessment and Tax Statement (Assessor). V. Bond Issue and Interest Statement (Secretary). MATTER APPENDED. A. Notes to the Report. B. Water-Right Agreement and Certificate. C. Closing Letter Other District Enterprises. Engineer's Jteport. REPORT. ALESSANDRO IRRIGATION DISTRICT. Irrigation in Southern California was begun by the Spanish Mission priests in the early part of the present century, and through the labor of their Indian converts or disciples. The Roman Catholic Church in the Mexican province of California was shorn of temporal power in 1833 ; its cultivated lands were taken from it, and afterwards granted to political and military favorites. These lands were notably the irrigated orchards, vineyards and fields at the mission stations of San Fernando, San Gabriel, San Bernardino, San Juan Capristano, San Jacin- to, San Diego, and perhaps several others. One city had been founded also on the basis of irrigation industry, the Pueblo of Los Angeles, in 1781. Here the irrigation waters were made community property from the start, and lands were ap- portioned to the settlers. The means for construction at command of these early ir- rigators were, of course, crude and narrowly limited. Their irrigation experience was equally restricted and methods nec- essarily primitive. Their lack of knowledge of the soils and climate too placed them at great disadvantage. Nature seemed to say that the low-lying lands in the valleys were the best, for these maintained a verdure, an herbage for the support of stock, timber affording shade and yielding firewood. The high- er lauds in the valleys, and generally the lands in the higher valleys (not those in the hills or mountains), on the contrary, were desert- like ; they produced only thorny cacti, sticky grease- wood andjjw* other irrigation neighborhood in Southern California has. The usual measure of such rights ranges between an inch to five, and an inch to ten acres. One to five is consid- ered a first-rate right for any kind of cultivation, where deliv- ery and distribution works are of high class, and cultivation and irrigation methods are not primitive and wasteful, and lands not specially absorptive. [See Notes 7 and 8.] The Alessandro works are most economical in delivery and distribution ; the lands are nowhere specially absorptive in character, and for the most part are rather the reverse (or will be when once wetted) ; crop cultivation in the dis- trict is not at all likely to be (in other than small proportion, only) of character such as to conduce to wasteful methods or habits in irrigation ; the class of irrigators is almost certain to be specially intelligent, thrifty, and careful not to over-irrigate. Hence, I am of the opinion that the B. V. I. Co. water certifi- cates call for all the water which this district can, in any rea- son, require for the highest and most remunerative class of irrigation practiced in this country. The water rights sold by the Bear Valley Irrigation Com- pany are represented by certificates which have something the character of special water-stock share.?. There have been two general issues of these, Classes " A " and " B," respectively. Those received by the Alessandro District, under the contract aforesaid, are of Class B. They call for a supply cf one-eighth of an inch to each certificate, and the district has acquired 51,- ooo such certificates, or two to each of its 25,500 acres. The maximum rate of deliver}' is fixed at the figure just stated, and the total amount to be furnished in any year, under any one certificate, is one acre-foot, or 43,560 cubic feet of water. The water-supply contract and the text of the water-right certificates are annexed in full to this report, and hence it is unnecessary to review details of the subject under the present heading. The originals plainly, and in good order, set forth all significant conditions of the service. Engineers Report. 23 This seems to have been the only way that a supply of water could have been had for this body of land, within moderate means. Conditions are such in the special region, that water- supply projects require great capital and adroit management. No single irrigation district could secure capital sufficient to carry out such a project as the B. V. I. Co. has carried out and is perfecting here. Public corporations, with popularly elected officers, are in their nature incapable of that thorough and elas- tic business management necessary for success in such enter- prises under conditions of the kind which govern in this State. For the purpose of this report, I have made an examination and study of the present and probable future water-supplying ability of the Bear Valley Irrigation Company, of their engage- ments to furnish water, and their program or scheme of works, etc., to fulfill these engagements. And I am of the opinion that this company can and will fulfill its contract now existing, to supply the Alessandro Irrigation District, and in accordance with the terms of the water certificates issued to the district under that contract. This subject might be treated more at length, and the mere opinion be substantiated by demonstration, but such treatment would very much lengthen this report, and make it less read- able. In a special paper on the water-supplying capabilities, at large, of the B. V. I. Co., now in course of preparation by the writer hereof, the complete review will be presented. The foregoing opinion should be regarded as quite full and decided enough for all purposes of this particular district enterprise, so far as the water-supply question affects it. WATER DUTY AND DELIVERY. In the preceding article I have expressed the opinion that this district had secured an ample water supply, by its purchase from the B. V. I. Co. of two Class B water-right certificates for each acre of district area. Certificates of this class limit the total quantity of water 24 Alessandro Irrigation Dtstria. furnished per year to one foot in depth, and the rate of deliv- ery to an inch of flow to eight acres. The Alessandro District, having two certificates to the acre, is entitled to receive twice this depth of service, and at double the above rate of delivery. The maximum service, then, would be at the rate of about .3 foot in 30 days. This, as a maximum monthly demand, is about 15 per cent of the annual volume. Now, experience has shown that the greatest monthly demand, where the supply is at the rate of one inch to five acres on fully developed irrigation of this class, is at the rate of 18 per cent of the total annual con- sumption. Hence, it may be seen at a glance that the duty allowed for in Alessandro District is quite sufficient. The rate of delivery and commencement of use of water in succeeding years, under the contract, is, in terms of maximum service, as follows : Time of Commencement. No. of Certificates. No. of Acres. No. of Inches. June ist 1891 4OOO 2,000 CQO , \J\J\J O'-"-' April ist, 1892 6,006 3,000 750 " ist, 1893. ...- 6,000 3,000 750 " ist, 1894 6,000 3,000 750 " ist, 1895 6,000 3,000 750 " ist, 1896 6,000 3,000 750 " ist, 1897 6,000 3,000 75 " ist, 1898 6,000 3,000 750 " ist, 1899 5,000 2,500 625 51,000 25,500 6,375 WORKS AND COSTS. The case of Alessandro District is different in an important respect from that of other districts heretofore reported upon. Its water supply, delivery, and, for the greater portion of its area, its distribution works also, are built virtually by contract at a prefixed price, and for the amount of bonds already voted. So, for one important purpose of this report, it does not much matter what the actual cost of construction of works may be ; for the district is bonded to the extent of $30 per acre no more and no less. Engineer's Report. 25 But although the full extent of district indebtedness is thus determined from the start, the question of value of works still remains of interest as a factor, both directly and indirectly, in the value of the security offered for the bonded debt, even though prefixed and limited as above. To well understand the situation as to works and cost of works for the irrigation development of Alessandro District, it is necessary to know something of the history of the enterprise. The Bear Valley L,and and Water Company was incorporated in 1883, with a capital stock of $360,000, divided into 3600 shares. It was a water-suppljdng company, and built and owned the Bear Valley dam and reservoir, and other works. In July, 1890, the Bear Valley and Alessandro Development Company was formed, with a capital stock of $400,000, and with the objects, in general terms, of (i) acquiring control of the B. V. I/ & W. Company, (2) buying lands suitable for irri- gation, (3) delivering and distributing Bear Valley water to them, and (4) selling them, thus improved, at a profit. A tract of about 2 1 ,000 acres, now within the Alessandro dis- trict, was purchased, and 2000 of the 3600 shares of the B. V. I/. & W. Co. stock was secured. The construction of a main conduit was commenced, to deliver waters from the Santa Ana river to the land bought, which was called the Alessandro tract. The plan was to fully deliver and distribute water to these lands, and sell them in small tracts, for enough to pay a profit oncost of land and the water service, and with contracts to pay a year- ly water rental that would thereafter yield a revenue to the company. In November, 1 890, the Bear Valley Irrigation Company was organized, with a capital stock of $4,000,000, and it took all the rights, privileges, works, lands and contracts of both the B. V. L. & \V. Co. and the B. V. & A. D. Co. The latter company took stock of the new company for its properties, and now holds a controlling interest in it. The new company was organized to carry on the business of both companies which had preceded it, and has continued to do so. In December, 1890, and January, 1891, the Alessandro Irri 26 Alessandro Irrigation District. gation district, embracing the 21,000- acre Alessandro tract of the B. V. I. Co. , and about 4500 acres of other owners, was formed ; and under the subsequent agreement for water-rights hereinbefore explained, the B. V. I. Co. became a contractor to deliver water to and upon the district along certain main lines of supply. This agreement was, of course, for the en- tire district, and involved the construction by the B. V. I. Co. of all necessary main works. The Board of Directors of the district in June (1891) adopted a resolution to the effect that ' ' the owner of every ten-acre lot ' ' in the Alessandro Irrigation District, before taking water on ( ' said lot, must first pay his exact pro rata of the expense of ' ' piping, or conveying in brick flumes, the water from the Bear " Valley Irrigation Company's pipe lines or canal, to the high- ' ' est comer of said lot. Said pipe line or brick flume to become ' ' the property of the Alessandro Irrigation District, and to be " thereafter maintained by said district." Meanwhile, the B. V. I. Co. and its predecessor, the B. V. & A. D. Co., had been dividing its 2i,ooo-acre tract, putting in distribution works for, and selling it in lots of 10 acres each. In making the.35> 000 $8,100,000 $13,200,000 I believe these to be conservative estimates and predictions for the times to which they apply. It must always be remembered, in studying the question of values in such districts, that it is the water united with lands of certain characters, subject to particular climatic conditions, and in the hands of a specially thrifty population, that consti- tutes the basis. A district of this class is essentially a development enter- Engineer's Report. 33 prise. Its values are created with the money that is put into it as a project. To look for real value, as a basis of credit, behind the created values of the development work, is to look for that which no one for a moment maintains is in existence. BONDED INDEBTEDNESS. The Alessandro District bonds having been issued to the extent of $765,000 for water delivered, (distribution works, thrown in, as it were,) there is now, as security for the loan contemplated by the law, property now assessed on a valuation of $2,436,036 ; of which $2,396,819 is the rated value of the farming lands. In my opinion, these lands are now actually worth $3,000,000. Considering all the property pledged under the law, on the basis of figures in the preceding article, the district which is bonded for $30 per acre, is now worth about $131 per acre ; within 10 } r ears will be worth $318 ; and within 10 years addi- tional $51 8. Arrived at, in a general way, as above written, these valuations are from 30 to 50 per cent within the limits of probabilities which, in my judgment, ma}' well be expected in the light of development precedents in this region ; even allow- ing yet for immense shrinkage of profits in the industries on which all values here depend. [See Notes 13 and 14.] PRESENT FINANCIAL CONDITION. The finances of this district present a very simple problem, in so far as the present report is concerned. On the yth of March, 1891, by unanimous vote of the electors, the Board of Directors were authorized to issue and sell bonds of the district to the par value of $765,000 ; which was at the rate of $30 per acre on the entire area. This was done on May 6th, and on the same day the entire issue was paid at par to the Bear Valley Irrigation Company for water rights (represented by 51,000 Class B certificates) and water delivered, as per the terms of the contract already ex- plained. [See Exhibit V.] During this first year of district existence, an assessment 3 34 Alessandro Irrigation District. of property, for purposes of taxation, has been made at the time of year prescribed in the law, but the time for collecting taxes has not yet come. For this reason the accounts known as the General Fund and the Bond Fund, which are credited with tax receipts to meet, respectively, current administrative expenses, and the interest 011 and principal of bonds, have not as yet been opened. [See Exhibit III.] The tax rate has been fixed at $2.25 on the $100, and the total levy for district purposes is $54,384.32. FUTURE FINANCIAL OUTLOOK. The total assessed valuation of the property in this district is now $2,436,036. With the realization of irrigation now in rapid progress, and in large degree, practically, consummated under the plans described, and with the water-rights contracted for, in my opinion, this taxed valuation, for the purposes of district enterprise, is altogether reasonable. It is a fair index of actual values at the present time, rated on holdings now in individual ownership and gauged by precedent, the most con- clusive and applicable in matters of property assessment in this country. It is about 70 per cent of the present fair commer- cial value which I have arrived at in the manner explained in the preceding article. With this as a first step, it will, in my judgment, be reasonable to assume that the assessed value may, 10 years from now, be found at about 60 per cent of the com- mercial value for that time which I have undertaken to foretell. And, finally, for the period still 10 years later, or 20 years from now, in my judgment, we may reasonably expect to see the as- sessed value at as much as 50 per cent of the presumed commer- cial value for that time. A brief statement of estimates, in this line, based on the foregoing, w r ould appear as follows : Period of Time. Commercial Per cent of Values. Com. Value. Valuation. When Irrigation commenc- es, (now) $ 3,350,000 70 $2,436,036 10 years from now 8,100,000 60 4,860,000 10 years, still later 13,200,000 50 6,600,000 The above projected valuations are intended to cover all Engineer's Report. 35 classes of property taxable in the district, but they make no allowance for increase of values for railway property which is now taxed. They are not to be taken as indicative of values of farming lauds alone. The foregoing article on District Val- uation has dealt with this point. For purposes of an illustration of how this district may meet its bonded debt, I assume that when the time comes for levying the first tax, from the proceeds of which, under the law, the first payment of the principal is to be made the eleventh year from the time of issuing bonds the taxed valuation of property in it will be $4,500,000 and in the last year for such payment the twentieth from time of issue this basis of revenue will be $6,500,000. Then, allowing the increase to be uniform, for the period at the rate of $200, cooper year and observing the provisions of the law about percentages of the par values of bonds to be paid off each year, I project an assessment and tax- lev}' schedule on bond account, for those years, and embody it in Bxhibit II. ADDITIONAL BOND ISSUE. The issue of $765,000 in bonds by this district was made on the basis of its full area 25,500 acres. Since this* action there has been no change of district boundaries or area. Uncer the contract with the Bear Valley Irrigation Company, the devel- opment methods followed by that company and other large land owners, and the resolution of the Board of Directors of the district, all as heretofore set forth, the district will be fully supplied with water and works complete, at the cost of these bonds already issued. Hence, unless there is failure on the part of the B. V. I. Co., and I see no reason to regard it as otherwise than a thoroughly reliable contract or in this business, there can be no necessity for any further issue of bonds by this district on the basis of its present acreage. There might be an increase of area, by addition of more lands some time, in which event there would, of course, have to be a further issue of bonds for water rights and works on the basis of the added acres. 36 Alessandro Irrigation District. RIGHT OF WAY MATTERS. This district, as must be apparent from the foregoing, has had no dealings, and consequently no trouble and no expense, on the score of right of way for works. The contracting water compan}* has met all such questions on its main lines of supply to and through the district, and the property owners within its borders construct or pay for distributaries through lands owned by themselves, and, of course, grant right of way for the pipes thus laid. CONTRACTS AND CONTRACT RATES. For the same reason, there is no statement of contracts and contract rates on district account to be presented, other than that concerning the one contract made with the Bear Valley Irrigation Company. The water privileges controlled by this contracting company, and available for immediate utilization in supplying Alessandro District, are certain rights in the waters of Santa Ana river and Mill Creek, and the reservoired waters of Bear Creek, all on the western slope of the San Bernardino mountains. From a commanding point in this localit)* the present supply is brought by the pipe and tunnel line hereto- fore described. The company has just located and commenced construction on a line of conduit involving canals, tunnels and pipe lines of great cost, to bring the waters of Whitewater river, which now flow from the eastern face of the San Bernardino mountains out into Colorado desert, around the mountain, through San Gorgonio pass, and, piercing the ridge east of Al- essandro District, into San Jaciuto valley. These two lines, developed by the addition of more pipes and enlargement of the open conduits, as necessities and engage- ments require, will be the main routes of delivery of Bear Yal- lejr I. Company waters to all its customers on the higher lands in the San Jacinto valley, the Alessandro and Ferris Districts being the chiefest. It has another source commanding service to lower-lying lands in this region. The main works to and through the lands of its customers, built by the B. V. I. Co., Engineer's Report. 37 remain its property, subject to and devoted to use in perform- ing its contracts to the customer, in each case. Its contract is to deliver and furnish water to the Alessandro District, not to build works for it. The works which the district will own are those for distribution, and these are built by the land owners individually the B. V. I. Co. among the number and are presented to the district without charge. COST OF THIS IRRIGATION. In like manner, the question of cost of irrigation in this dis- trict is greatly simplified. Thirty dollars per acre covers the cost of water delivered. The actual cost of the B. V. I. Co. works to effect this service is yet unknown, even to the com- pany itself. It is sufficient for the purposes of this report to say, that Alessandro District could not have secured a water supply by any other means at any less cost, even if it could have done so at all. If we assume, as is not unlikely to be the case, that main works for the full service, pro rata, of Alessandro District, will cost the B. V. I. Co. as much as $17 per acre of the district area r the cost of this irrigation system, including the distribu- tary works at $18 per acre, asalreadv reported, when looked at merely from the engineering standpoint, will have been $35 per acre. Taking lands worth certainly less than $20 per acre without water, and making them worth, immediately, really $150 per 'acre, works for the purpose might be regarded as cheap at much more than the above possible cost. The land owner in this district ultimately will have paid for works and water rights, in purchase of land and in payment of bonds, $48 per acre, that is, $18 as part of land cost, and $30 for water and delivery. CHARACTER OF THIS WORK. The works designed and in construction to serve this district are of a kind as yet peculiar to Southern California. This class of irrigation construction, in the present stage of the so- cial and material growth of our country, is commercially prac- 38 Alessandro Irrigation District, ticable, on a large scale, only under conditions similar to those found there. Moreover, the element of speculation must be present in the development enterprise, and conditions must fa- vor this. Whether it is speculation on the part of an individ- ual, a private corporation, or a community organized under a districc or other law, does not so very much matter. The essen- tial point is that those who in the initial stages of the enter- prise the first years of development assume the risk and per- form the labor, shall see their way clear to making money by the venture. The cost of water- rights and irrigation works has to be added to the costot" lands served, and the limit of sub- sequent land value over total cost must be great enough to show a large margin of profit in the initial operation. The profits from irrigation industry itself must be left to the culti- vator, who is the actor in the subsequent phase of progress. The great margin of profit in enhanced land values, which an expenditure of $25 to $50 per acre for works makes neces- sary, is with absolute certainty to be found only where the raising of fine fruits is, by irrigation, made practicable on lands primarily of little cost. Southern California and localities in the Central and Northern part of this State present conditions where- under this is possible. Here are found, dry and desolate lands and soils, with exposures suited to the growth and maturing of the very finest and most delicate fruits, and climatic conditions that are essential to such production, if only moisture is prop- erly applied. But these are not all that is necessary to insure full measures of success in that horticultural practice upon which high-class and high-cost irrigation development enterprises depend. Good and suitable soils, abundant water-rights, good works and fa- vorable climate for the growth and ripening of fine fruits will not alone, however much advertised, at the present stage of social growth, promptly bring to an irrigation neighborhood the population necessary to work out those successes which create the high values of land wherein lie the incentive for first action in such enterprise. Neither the irrigator nor the horticulturist, pure and' simple, nor 3 T et the laborer, farm hand, nor farmer, represents the character of immigration essential to the making of such com- Engineer's Report. 39 munities as take $200 to $400 per acre per year off of irrigated lands in Southern California, and have built up from nothing, cash land valuations ranging between $500 and $1,000 per acre, unimproved. That country has been made, and this species of enterprise has been made possible, by another character of man, who has come to it because he can live there comfortably. It is not climatic advantage as affects horticultural growth, alone, which he finds there, but as affecting human life in the horticultural neighborhood. The climate and landscape surroundings of the localities re- ferred to in California, and the facilities for pleasant change, are such as not only to make possible, but to invite, the resi- dence of a more intelligent, energetic, ingenious and thrifty class of people to engage in irrigation than are found elsewhere as irrigators. They come to these neighborhoods with capital some large, some small, so far as money goes but nearly all with some capital in money, and with much more than the old- fashioned agriculturist's or of the foreign irrigator's capital of intelligence, pluck, and business training. It is the presence and continued coming of people of this character, in controlling numbers, that makes commercially practicable the construction of the high cost irrigation works, of which Alessandro District affords the present best example. We have not been indebted to either irrigators, farmers, or horticulturists from abroad, or from other States, nor yet to those who had become such under the old time methods and primitive works in California, for the development of that high- er order of irrigation water service and culture methods which I have herein described. A class of intelligent, thrifty, and industrious business men came here, and became irrigators, not only because of business enterprise, but on account of the pleas- ant and healthful surroundings and conditions which they found in a number of possible irrigation neighborhoods. These people, finding that they could live as they would want to live, in moderate luxury even, in these neighborhoods, and in good health and comfort, also found dormant energies and undeveloped wealth. Being possessed of the business qualities and the means, they have made far greater horticul- 40 Alessandro Irrigation District. tural successes, and correspondingly greater revenue, from lands than an}* set of mere irrigators or fanners ever would have achieved here. The}' were not tied up by prejudice, former practice, and a little know-ledge of the subject. They knew nothing that hampered them in learning to make the most out of the country. They had the means to try. They tried, and again tried, and succeeded. They are a class of people w r ho can afford to pay more for lands than a people who have had less advantage of education and business training, and have been raised in communities of less thrift ; because they not only cul- tivate and manage better on the lands themselves, but enter the markets of the world equipped as business men, and make rep- utations and get high prices for their products. While, of course, by far the greater number of such people coming here have simply settled down to business and horticul- tural pursuits, representative spirits have taken development enterprises in hand. The expenditure of thirty to thirty-five dollars per acre, and even more, on lands worth one to twenty dollars, dry, in works to make them yield large margins of profit over interest on sev- eral hundred dollars per acre, and in rendering possible a bus- iness at once pleasant and healthful, as well as profitable, for cultivated people, has been to such men not only a solid busi- ness proposition, but an operation for enthusiasm. This con- stitutes the business of high-class irrigation development. Irri- gation, principally, of fruits and the vine, is its supplement. The Alessandro District is an enterprise purely of this class. It was started with the ownership of 21,000 acres, of the total 25,500, in the hands of a speculative company; and the re- maining 4,500 acres were owned by less than a dozen individ- uals, who themselves wanted to serve water to it for purposes of speculation. In my judgment, these circumstances afford the strongest possible assurance of the district success. No mere community of small land owners can compete in the ini- tiation of primary development enterprise, with a well managed speculative company. In the first place, land on which a large population could Engineer's Report. 41 have existed without irrigation is not suitable to that class of enterprise which will enhance values sufficiently to justify con- struction of the works here necessary. A small population of men of no special business experience cannot manage such an enterprise to as good advantage, commercially, as a powerfully organized speculative company. The Alessandro, the Ferris, and some other irrigation districts now developing in Southern California, are made possible by the existence of great water- supply companies, which can, with profit to themselves, fur- nish water to the districts at costs which their lands will ulti- mately bear. But population there must be promptly, when a large district is opened up for irrigation, else lands lie dormant, and the interest account may not be met. To secure this pop- ulation, extensive advertising and keen business management are essential. These are only assured where there are such pow- erful organization and incentives as speculative enterprise of this character affords. In the next place, no such complete and perfect works of dis- tribution as those going into Alessaudro District ever would have been attempted, but for the unification of the speculative advantage to be gained by them. These works are put in to sell the lands at high figures, and they will do it, are doing it. There was no division of opinion on the question of build- ing them, no community to be consulted, no vote to be had. The speculative company builds them, and gives them to the district. The purchasers of land the settlers pay for them in advanced land prices. The better works enhance actual values much more than the cost difference over ordinary con- struction. And, moreover, system and economy of construc- tion keep cost much below that probable under community management. The othtr large land owners take the cue. The improvement becomes complete in the district. A specially de- sirable and thrifty class of settlers is thus drawn in ; and dis- trict success is assured. Finally, the speculative company has an interest in the suc- cess of the district beyond the mere selling of its lands. It re- mains a water-supply company to the district, and the rates it is to receive under its contracts with the district itself and with the persons to whom it sells lands are such as to leave this a 42 Ales sand ro Irrigation District. profitable business. Hence, its interests will prompt that con- tinued effort which a great corporation can put forth in the in- terest of a neighborhood, but which a new and weak commu- nity can not, to advantage, exercise for itself. The objection to water monopoly raised in connection with irrigation develop- ment in this country is not honestly applicable in cases of this particular kind. In my judgment, such developments could not, for reasons in part only given above, be economically and suc- cessfully realized without it. As to the subsequent burden of water-rentals or annual payments : although such as will be remunerative to a company, they are not found burdensome on these communities. The advantages gained more than offset them. The fact, therefore, that speculative enterprise has been at the bottom of Alessandro District formation and promotion not only accounts, in great measure, for the high character of its works, but, to my mind, is a point in favor of its probable suc- cess as a community or settlement. This class of works would not be possible, commercially, in any of the old irrigation countries of Europe, Asia or Africa, and I doubt whether as great expense and minute thorough- ness are justified by conditions in our own country, outside of California. Consider for a moment the supplying, delivery and distribu- tion of water to these Alessandro lands. It is brought in a steel pipe under high pressure, from a watershed not tributary to the valley, a distance of ten miles ; then it is put through a concrete-lined tunnel about half a mile in length, piercing a dividing mountain ridge ; then in concrete-lined ditches, steel pipes, and "iron-stone" cement-laid pipes, two to fourteen miles additional, to the commanding corner of each twenty- acre tract on which it is to be used. Practically, none of it is lost. It is brought from its mountain home, pure, sweet, and quite cool. It is delivered fit for domestic use. It will be so used up to the limit of demand. . And even in its distribution within the little fields and orchards, it is conducted in pipes, or cement or brick ditches or flumes, to within a few feet of Engineer's Report. 43. the especial square yard of ground into which it is permitted to soak in irrigation. There are as yet no works of as high an economic grade pro- jected elsewhere, to serve large areas of land, as are those of the California series into which this Alessandro District system enters. The company which has contracted to deliver water to the district constructs the supply arteries of the system. The dis- trict is one of its customers. The district works are simple, easy of construction, cheap of maintenance, and will be eco- nomical of operation and administration, and lasting in charac- ter. They consist of hard-burned "iron-stone," or vitrified clay pipes, laid with cement joints, outlets of similar materials with iron shutters, measuring boxes of concrete or vitrified clay, with iron weirs, and the standard (town supply) water pressure-gates at outlets from main pipes. CONDITION OF THE WORK. For the reason that the district is not constructing any works, it is not possible to present a CONSTRUCTION PROGRESS STATEMENT such as has been made a part of reports hereto- fore submitted by the writer, on other districts. The Bear Valley Company's work is being pushed forward with every apparent effort at such haste as thoroughness will ad- mit of. It has expended over $400,000 in supply and delivery works, intended for its customers in this valley. It has ex- pended over $180,000 on works within the limits of Alessandro District, and of this amount more than $80,000 has gone into distribution works which will become the property of the dis- trict. Over 4000 acres of land may now be served as finally intended, and the work is progressing as fast as materials can be delivered by their sub -contractors. PROBABLE IRRIGATION EFFECT. To one who has read the foregoing pages, it may seem alto- gether superfluous to say anything further as to the probable effect of irrigation in the Alessandro District. The reports, ot 44 Alessandro Irrigation District. which this is a single one only, are attempted to be made un- der a system such that they may be compared as between them- selves, and used for reference singly. It is an aim to have matter of each certain class under its heading, even though, incidentally, it has found place in other articles, so that repeti- tion is made necessary where the caption would lead one to find it. Hence, at the risk of the charge of prolixity, I again re- view here the horticultural outlook for Alessandro District, as consequent upon irrigation. Practically, there had been before the district work com- menced less than 1000 acres in cultivation of the lands now in the district. A little grain was raised. A struggling orchard and vineyard or two were found. The remaining lands afford- ed a scanty pasture to sheep and cattle for part of each year. Irrigation is changing this completely. The orange and lemon, the olive and fig, and the vine are occupying the higher and more sloping lands. Deciduous fruits of many kinds, and es- pecially the pear, with alfalfa and field vegetables on small areas, will be grown on the lower and flatter lands of comparatively heavy soil. The agricultural change is now progressing. It will be as complete and radical as any such change could be. The Ales- sandro District lands, lately a waste, almost, are becoming or- chard lands, vine lands, and green pastures. Alfalfa for hay, and field vegetables will be grown for home consumption. Cit- rus and deciduous fruits, olives and the produce of the vine , will find a market by rail, chiefly far from this state. LITIGATION AND LOCAL SENTIMENT. There has been no litigation about Alessandro District affairs. There has been no difference of opinion as to any question of vital importance touching the district, either among those who live in it, or those who are interested in its lands. The senti- ment of voters and land-owners, alike, is all in favor of irriga- tion by the means adopted, and on the basis of the bonded in- debtednees it makes necessary. The life of this country depends on irrigation. With it, riches come. Without it, poverty. Alessandro is in favor of irrigation, and is able and will be able to pay for it as payment becomes due. Engineer's Report. 45 CONCLUSION. The Irrigation District reports, of which this is but a single one, are being made with the view, so far as the writer can give them character, of stating and explaining the physical and engineering problems, describing the works, and estimating the cost of irrigation to the several districts, with the object of exposing the business status and prospects of each one. The information is, as I understand, desired in this form for those who may contemplate having relations with any such district, or may desire to invest in or handle its bonds. There are five general questions which may affect the value of such securities : I. Has the district issuing them been given due authoriza- tion and power so to do ? Is the law under which it is formed, constitutional ? Is the organization one which can be granted such power ? Has it been granted the power ? II. In the case of the district whose securities are under con- sideration, have all the proceedings taken under this law, up to and including the issue and sale of the special bonds in question, been in accordance with the provisions of the law itself? III. Is the realty security offered under the law, commensur- ate in value with the debt proposed to be put upon the dis- trict to carry out its irrigation enterprise ? IV. Is the enterprise itself, in which it is proposed to use the money raised on the district bonds, a good one, from en- gineering and irrigation standpoints ? Can it be made to succeed within the limit of cost contemplated, or within a limit commensurate with benefits which the people of the district may expect to receive ? V. Are other conditions with respect to this district, and its enterprise, such as to render business prospects therein good ? Will its people probably be prosperous under the burden of debt they take on themselves for this purpose ; 46 Alessandro Irrigation District. and hence, probably be inclined to pay the interest and principal of this bonded debt, without making trouble for their creditors ? It is understood, of course, that the constitutional and legal points raised by the first interrogatory, and those of law and procedure raised by the second, are foreign to the aspect of the subject to be viewed in this report. The writer hereof undertakes, for the case in hand, to defin- itely answer the third and fourth questions, and also to throw some light upon, and express an opinion on, the points raised by the fifth. In my opinion, based on facts and reasons stated in and ap- parent from the foregoing review of this enterprise, The marketable value of the lands of this district is now much in excess of the bonded debt placed upon it for the pur- chase of water rights and delivery of water to it. This is a specially favorable area for irrigation enterprise of the character here projected, and one suitable to be embraced in an 'irrigation district. Irrigation industry should succeed in this district. The lands with the water rights should be at least doubled in value, as the effect of it in a very few years ; and within another few years, as population presents itself and demand grows for the prod- uct, these values should enhance as much more in addition. The values here referred to are those based on ability to pro- duce and support populations ; and not values based on the de- sire of independent people to possess beautiful grounds, or to engage in fancy farming. The property proposed to be pledged under the law is ample, and with a large margin in this case, as security for a bouded debt of $765,000, or $30 per acre on the district ; which is all there is any necessity, under existing circumstances, for plac- ing on it for its irrigation enterprise. The district itself has no engineering scheme. The water- supply contracting company constructs its own works and gives the use of them to the district for its service, in return for its bonds. The land owners construct distribution works of high class, and present them to the district. Engineer's Report. 47 The water supply for the district is contracted to be delivered by a great water-supplying company, having a large plant, com- manding extensive water rights and privileges, possessing a large capital, and rapidly extending its scope and apparent strength. The conditions generally now present, and those likely from ample precedent to prevail, are of character specially favorable to that social and business result in the Alessandro District which should tend to make it a goodJHHH. debtor. Any discussion of the principles of Irrigation District laws, or the merits of that which California has enacted, and under which this Alessandro District (and about thirty others) has been formed, would, of course, be out of place here. That is the political side of the question, with which the writer in his present capacity, can have nothing to do. Very respectfully yours, WM. HAM. HALL. SAN FRANCISCO, CAL., Oct. ist, 1891. 298958 4 8 Alessandro Irrigation District, Exhibit I. ALESSANDRO IRRIGATION DISTRICT. Works Construction, to Date, Within the District. By the B. V. I. Co. STATEMENT OF EXPENDITURES. Sept. 15, 1891. Excavation and Refilling. Materials of all Kinds. Labor. Totals. Main Canal On Redlands Boulevard South end ol Tunnel to Distrib. Res'r. . $1,634 79 $1,543 40 $865 55 $4,043 74 Distributing Reservoir 1,290 oo 267 25 90 oo 1,647 25 Main Flume On Redlands Boulevard Distributing Res'r to Hemlock Ave 167 99 i,7" 85 643 46 2,523 30 Main Flume On Ironwood Avenue From Redlands 33568 1,724 38 2,269 48 16,406 oo 321 46 112 20 2,926 62 18,242 58 Main Steel Fife On Cot- tonwood Ave. Redlands Boulevard to Lasalle St. . . Main Vitrified Pipe - On Grevillea Ave. Redlands Boulevard to Judson St . . 5,638 52 34,222 58 1,132 91 40,994 oi Main Steel Pipe On diag- onal line Judson St. to Frederick St 1,627 68 700 67 16,700 42 4,670 50 31 oo 343 6 1 18,359 10 5,714 78 Br. Main Vitrified Pipe On Quincy St. Main Canal to A.O.G. & F. Co. Tract Lateral Pipes Distributar- ies On Streets from The- odore to Heacock 20,985 24 53,942 01 5,099 05 80,026 30 Moreno Town Service Pipes . Totals 490 64 5,704 60 5 oo 6,200 24 $34,592 59 $137,438 09 $8,644 24 $180,677 92 JAMES T. TAYLOR. Engineer in Charge. 1 C s 0) I i II Exhibits. flj 222222222 * 4 &*&.*>& MMMNttC4 00 OOOOOO r^ c\ o !^oo r^o O O C) N <^5 *v ill T* ) M4 00 vo ""> "^^O 00 si ! l .2 -g 1 -2 1,2 NOO P< - N ro Tt ^88^9,82, X) ro - N r^vo 4 ^ o > ' i '5'5 i ' 49 50 Alessandro Irrigation District. Exhibit III. ALESSANDRO IRRIGATION DISTRICT. FINANCIAL STATEMENT. Sept. ist, 1891. General Fund. 1890^1 Receipts (no taxes yet collected) $645 oo Disbursements 443 85 Balance $201 15 Bond Fund. 1890-91 Receipts (no taxes yet collected) None Disbursements (no interest yet due) None Balance Construction Fund. 1890^1 Receipts Sale of bonds at par $765,000 Disbursements Paid for water-rights and delivery. . 765,000 Balance None Summarization . General Bond Construction Total Fund. Fund. Fund. Receipts $645 oo $765,000 $765,645 oo Disbursements.. 44385 765,000 765,44385 Balances . . . $201 15 $201 15 [Signed] B. W. BROWN, Treasurer. Exhibits. 5 1 Exhibit IV. ALESSANDRO IRRIGATION DISTRICT. ASSESSMENT AND TAX STATEMENT. ASSESSED VALUES OF. AREAS COVERED. VALUATION, iSgo'-gi. Farming lands $2,396,819 oo Improvements thereon 1,520 oo Town property 18,542 oo Improvements thereon 200 oo Railway right-of-way track and depot grounds 18,955 3 1 Total in district $2,436,036 31 ASSESSED VALUES OF FARMING LANDS. Average of district per acre $ 95 87 Highest for 40 acres 100 oo Lowest for 40 acres 33 50 Highest for 320 acres 100 oo Lowest for 320 acres 37 45 ASSESSMENTS. Rates of levy for district purposes (per $100 of val- uation) $ 2 25 Total amount levied 54)384 32 Total amount collected (collections not commenced) Nothing TAX RATES. State and county (per $100 of valuation) $i 60 District 225 Total $3 85 RAILWAY ASSESSED. Mileage 3 55 Rate per mile $ 5>54 75 Total valuation 18,955 3 1 [Signed] JOHN T. LEONARD, Assessor. 52 Alessandro Irrigation District. Exhibit V. ALESSANDRO IRRIGATION DISTRICT. BOND ISSUE AND INTEREST STATEMENT. OFFICE OF THE BOARD OF DIRECTORS, ALESSANDRO IRRIGATION DISTRICT. MORENO, CAL., Sept. i, 1891. This is to certify, that the Board of Directors of the Alessan- dro District have, up to date, disposed of bonds of the district to the total par value of seven hundred and sixty-five thousand ($765,000) dollars. These were all paid to the Bear Valley Ir- rigation Compan)*, at par, for 51,000 Class B i-acre Water-right Certificates, under the terms of the contract with that company, dated May 6th, 1891. [Signed] GEO. H. KELSEY, Secretary. A'ofes. 53 Appendix A. NOTES. NOTE i. tands may be of good soil, and upon a plain whose general form and slopes are suitable to irrigation, yet still be so rough in details of surface as to cause comparatively much expense in preparation for irrigation. Again, the soils and general appearance of a plain may seem favorable to irrigation, and yet, larger irreg- ularities of form in the ground surface long ridges and " coulees," swells and " draws " dividing the plain into eccentric subdistricts, and making excessive ground slopes, locally may be so pronounced and prevalent as to necessitate much extra expense in carrying out an efficient distribution system, economical of maintenance and in operation. The Alessandro District lands are, in large part, quite free from these drawbacks. They are, as a whole, favorable to economical distribution and low costs of preparation for irrigation. Again, to be economically handled under irrigation, a soil must be mellow, friable, receptive, and retentive of moisture, and must not ' ' bake," or form a hard rust after irrigation. Most soils thus favorable are not specially rich are light and sandy. The Alessandro District slopes are rich, and, for the most part, not light, but seem still to possess the above qualities favorable to working under irrigation. NOTE 2. Some rainfall records and estimates of precipitation in this southern coun- try are withheld from publication with this report, to be embodied with an opinion on the water-supply of the region generally, and now in course of preparation. NOTE 3. Data and statistics of crops and prices the practical money-making re- sults of irrigation in this region are purposely omitted from this report. They only go to establish values, and the writer feels that the statements herein on this point are quite sufficiently conservative, and justified by broad and well-known precedents, to be accepted without this burdensome species of demonstration. NOTE 4. From a business standpoint, the necessity for irrigation in any region de- pends on what it is desired to accomplish therein. A region may well support 10 people per square mile without artificial watering, but to support 100 people, irrigation would become an absolute necessity. And these figures may be much varied. Some dry regions, well cultivated, as in wheat-growing sections of this State, support not over 5 people per square mile. Some irrigated regions, as quarters of the valley of the Po in Italy, support 350 people per square mile; The necessity for irrigation for the support of such dense, or even what we may call " full" populations from 100 to 120 people, directly dependent on agriculture, to the square mile is not governed alone by the quantity of rainfall a country receives, nor is it to be determined exclusively by the fact of unproductiveness. A country may have ample rainfall and yet need irrigation to support such population, as much as one having practically none at all. Conditions of soils andsubsoils, of rainfall distribution, humidity and others of meteorological character, may be such as to turn the scale. There are lands in Northern California tillable and rich in soil ingredients, which will not sup- port five people per square mile under a rainfall of twenty-four inches. There are oth- ers in Southern California, and not " moist " lands either, which support twenty people per square mile under a rainfall of twelve inches, and without irrigation. 54 Alessandro Irrigation District. NOTE 5. There is no country where practical agricultural worthlessness and wealth (interpret the words as strongly as we may) lie more closely together than in Southern California. The presence of worthlessness is apparently essential to the existence of local wealth. If all this country were irrigated, and so not worthless, there would be little wealth produced by any of it. The atmosphere of an immense spread of surround- ing dry country is essential to the peculiar wealth-producing ability of the artificially moistened oases. There is no country where success, agriculturally, or rather horticul,turally, is or may be so apparently signal ; none, on the other hand, where failure often is so dis- mal and complete. Possibilities are to be judged of here, not by the casual farmers glance, but by broader views, which reach, perhaps, to some distant mountain range, and consider hydraulic problems much above the common. XOTE 6. The steadr advancement now found in Southern California is due to hor- ticultural growth. The town lot, speculative craze of 1885-88 is over with. NOTE 7. The " miner's inch" is a measure or unit of water flow now much used in connection with irrigation in California, and is about the equivalent of one-fiftieth of a cubic foot per second. NOTE 8. " Water duty" refers to the extent of service which any unit volume of supply will perform in irrigation. The cubic foot per second, or " second-foot," is the unit volume ordinarily referred to in speaking of duty under large irrigation projects having open canals of supply. The " miner's inch " is more often used in Southern California, where works are of a higher class, and volumes handled are much less. According to the character of cultivation, of soil and sub-soil, method of irrigation and kind of works of delivery and distribution, the duty of water varies in California, even under good management, between 50 acres to the second-foot, or i acre to the miner's inch, and 10 acres to the inch, or 500 acres per foot per second. NOTE 9. The value of this class of irrigation depends on the service of just as much water as, and no more than, the soil will take without starting lateral percolation or saturating it down to ground water. When these effects are produced this irriga- tion is excessive and will defeat its object- the production of sweet fruit. Young trees thus habitually over-irrigated always demand such excess thereafter, when grown. NOTE 10. The writer does not assume the role of consulting or advisory engineer, in this reporting duty. No criticism will be made on works or projects unless so bad as to affect the value of district securities. NOTE ii. Irrigation waters have cost, delivered (not distributed) in Southern Cali- fornia, in good works, from $50 to $400 per miner's inch of continuous flow, and have been sold at materially higher rates. NOTE 12. Values of lands of the classes here under consideration, although based o.i ability to yield revenue, yet depend, while a country is developing and being brought under cultivation, upon demand. It takes capital to bring an orange or olive grove in- to bearing. Those who have enough means and desire to take up these industries are not always equal in numbers to the supply of lands served with water and offered. Consequently, there are times of depression in irrigation development enterprise. NOTE 13. And after development of the irrigation industry, there must be, as in all business, periods of comparatively low demand for its products. It is not believed by the writer, though, that there is any danger of over-production of the principal fruits of irri- Notes. 55 gation in Southern California. There may be temporary gluts of markets, and losses accordingly, but better transportation facilities and more thorough handling in distrib- ution, it is believed, will profitably place Southern California fruits for many long years to come. NOTE 14. Commercial values of lands in Alessandro District might well be placed 30 per cent higher than the $150, $300 and $450 per acre, assumed as the sub-basis for figures at succeeding periods in the bond redemption illustration submitted. NOTE 15. The value of lands " as mortgage securities " depends on, and is gen- erally less than, their commercial value. Saving banks in California lend on lands from 30 to 60 per cent, according to circumstances of their secure values, or the amounts for which they could be sold at forced sale. NOTE 16. Comparing, for instance, Alessandro District works with those of Central District, the former will deliver and distribute in pipes to every lo-acre tract, the latter in open ditches to every 640 or 320 acres only. Hence, a potent reason for the wide difference in cost of distribution. 56 Alessandro Irrigation District. Appendix B. WATER RIGHT AND DELIVERY CONTRACT. THIS AGREEMENT, made and entered into the 6th day of May, A. D. 1891, by and between the Bear Valley Irrigation Company, a corporation, having its prin- cipal place of business at Redlands, in the County of San Bernardino, State of California, the party of the first part, and the Alessandro Irrigation District, a public corporation, in said County of San Bernardino, State of California, the party of the second part, WlTNESSETH : That the said party of the first part, for and in consideration of the undertakings of the said party of the second part, hereinafter entered into, has agreed and does agree to and with said party of the second part to sell and transfer to said party of the second part, and does hereby sell to said party of the second part, fifty-one thousand (51,000) Class "B" Acre Water Right Cer- tificates, issued by said party of the first part, and the said party of the first part further agrees to deliver the water represented by said fifty-one thousand Class " B " acre water right certificates at any point below the south end of the tunnel constructed by the said party of the first part in the southeast quarter (S. E. X) f Section Twenty-six (26), Township Two (2) South, Range Three (3) West, San Bernardino base and meridian, along the line of the said Bear Valley Irrigation Company's canal and pipe line, running southeasterly from the south end of said tunnel to Redlands Boulevard, within said Alessandro Irrigation District ; thence south along Redlands Boulevard to the southeast corner of Block Thirty (30) of Map No. I of the Bear Valley and Alessandro Development Company, of record in the office of the Recorder of said County of San Bernardino, State of California ; thence westerly along or near Grevillea Avenue to a point at or near the south- west corner of Block Twenty-five (25) according to said map; thence in a north- westerly direction to a point near the northwest corner of Block Eighteen (18) in said Alessandro Irrigation District ; thence in a southwesterly direction to the southwest corner of Block Two Hundred and Nineteen (219) according to said map ; thence by a line to be hereafter located, to a point at or near the southeast corner of Bleck Three Hundred and Fifteen (315) according to said map, or along any other main line to be hereafter constructed by said Bear Valley Irrigation Company, provided that the said party of the first part, in delivering water along any main pipe lines referred to herein, shall be obliged to provide no greater capacity than is sufficient for the water represented by two of the aforesaid cer- tificates per acre for the lands lying below said main. And the said party of the second part hereby agrees to and with the said party of the first part to purchase from the said party of the first part the fifty-one thous- and (51,000) Class " B " acre water right certificates issued by the said party of the first part, and also agrees, in payment therefor, to transfer and deliver abso- utely to said party of the first part the bonds of the said Alessandro Irrigation District, caused to be issued by the Board of Directors of said district, pursuant Water Right and Delivery Contract. 57 to a vote of the qualified electors of the said district at a special election duly held therein on the lyth day of March, A. D. 1891, to the amount of seven hun- dred and sixty-five thousand dollars ($765,000) at their par value, all of said bonds to be of issue No. I, and to bear date of May 6th, A. D. 1891, payable in ten series, and bearing interest at the rate of 6 per cent per annum, payable semi- annually on the first days of January and July of each year. And it is further expressly agreed and understood by and between the parties hereto, and as a part of this agreement, that the use of water represented by four thousand (4,000) of the aforesaid acre water right certificates shall commence on the first day of June, A. D. 1891 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1892 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1893 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1894; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1895 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1896 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1897 ; That the use of water represented by six thousand (6,000) of said acre water right certificates shall commence on the first day of April, A. D. 1898 ; That the use of water represented by five thousand (5,000) of said acre water right certificates shall commence on the first day of April, A. D. 1899 ; and that the water represented by each of the aforesaid fifty-one thousand (51,000) acre water right certificates shall be ready for use thereon on the day on which such use thereof, as stipulated above, is to commence, and continuously thereafter. And that the first semi-annual payment of One Dollar and Thirty-nine Cents ($1.39) to become due and payable on each of said certificates shall commence on the first day of the month of October, of the year in which the use of water on such certificates is to commence, as stipulated above, and that the further semi- annual payments of One Dollar and Thirty-nine Cents ($1.39) on such certificates shall be made on the first days of April and October of each year thereafter. And it is further agreed by and between the parties hereto, and as a part of this agreement, that the Board of Directors of the said Alessandro Irrigation District shall have the right, on the first day of April, A. D., 1893, an ^ on the first day of April in each year thereafter, to have an increase in the number of the aforesaid Acre Water Right Certificates on which the use of water shall commence in such year, in accordance with the foregoing stipulations, until the use of water shall have commenced on all of the aforesaid certificates ; provided that the said Boa'd of Directors shall notify the said Bear Valley Irrigation Company of such desired increase at least six months prior to the time when such increase is desired. IN WITNESS WHEREOF, the said parties hereto have caused this contract to be executed by their respective Presidents and Secretaries, and the seals of said parties to be hereto affixed, the day and year first above written. 58 Alessandro Irrigation District. Exhibit " I." Total Issue, 100,000. Xo Ctfs. CLASS B. BEAR VALLEY IRRIGATION COMPANY. ACRE-WATER-RIGHT CERTIFICATE. In CONSIDERATION OF DOLLARS, in hand paid, and the pay- ment on each certificate issued of $1.39 on the first day of April, and $1.39 on the first day of October, of each year, the BEAR VALLEY IRRIGATION COMPANY, a corporation, organized under the laws of the State of California, and having its principal place of business at Redlands, San Bernardino County, Cal., hereby issues to Class B, Bear Valley Irrigation Company Acre Water Right Certificates. Each Certificate is issued subject to the contract be- tween the Bear Valley Land and Water Company with the North and South Fork Ditch Companies, Class A Certificates of the Bear Valley Land and Water Company, contract between the Bear Valley Land and Water Company with the Redlands-Lugonia and Crafton Domestic 'Water Company for 200 1-7 inches of water, contract between the Bear Valley Land and Water Company with the Crafton Water Company for 57 1-7 inches of water. Each certificate is hereby guaranteed by this company to entitle the owner thereof to receive one acre foot of water per year (an acre foot being 43,560 cubic feet of water) to be supplied from , and from no other source whatever. The owner of this certificate may elect to cumulate the use of the water which each certificate entitles him to receive in any manner he desires, provided, how- ever, that this Company shall not be compelled to furnish more than 1-8 of an inch of water to each certificate, at any one time (an inch of water is equal to a flow of 1-50 of a cubic foot of water per second). The water called for by these certificates shall not become appurtenant to the land upon which the same may be used, but these certificates shall always be personal property, and a transfer hereof shall only be made by surrender of this certificate to the Company, prop- erly endorsed, and the issuance by this Company to the transferee of a new certificate. It is agreed between the holder of this certificate and this Com- pany that, on each certificate, there shall be paid $1.39 on the first day of April, and $1.39 on the first day of October, of each year, and that said sums shall be due and payable to the Secretary of the Company, at the office of the Company, at Redlands, Cal., without notice, and if not paid within 60 days after the same becomes due, this certificate shall become null and void, at the election of this Company, and all payments shall be forfeited to the Company as liquidated damages for the non-payment of such sums. Such forfeiture shall become effect ual upon the passage of a resolution of the Board of Directors declaring such forfeiture. It is agreed that time is of the essence of this agreement, and that by the receipt of this certificate, the holder thereof assents to and agrees to all of the above stipulations. Secretary. President. Closing Letter. 59 Appendix C. CLOSING LETTER. OTHER IRRIGATION DISTRICT ENTERPRISES. WM. HAM. HALL, STATE IRRIGATION ENGINEER OF CALIFORNIA; 1878-1888. CONSULTING CIVIL ENGINEER, SUPERVISING IRRIGATION ENGINEER SAN FRANCISCO, U. S. GEOLOGICAL SURVEY ; 1889-1390. FLOOD BUILDING. SAN FRANCISCO, Oct. 5th, 1891. J. W. NANCE, ESQ., President State Association Irrigation Districts, DEAR SIR : In transmitting the foregoing report on the Alessandro Ir- rigation District, it will not be amiss for me to guard against possible misapplication of some of its paragraphs ; and, hence, this closing letter on the subject of irrigation district enter- prises in general. Under the request you have made to the directors of the various districts, to have their projects examined and reported upon for information in financial circles, as suggested to you and others by certain leading men in San Francisco banking circles, it is but natural that the district officers having most confidence in their enterprises, and with plans of works already well developed, should be first to request that such projects be reported upon. The Alessandro District is a case in point. It has been the third to make application for my services, and is the third re- ported upon, and I have found its engineering affairs in good condition. It has now transpired that apparently three of the very best districts in the State have been first to present themselves. The inference plainly is, that what might be reported of some other districts, should I be called on to examine them, is not to be forejudged by what I have written in the reports thus far made. 60 Alessandro Irrigation District. As I have tried to be plain and thorough in treating of dis- tricts whose enterprises deserve approval and even praise, in my judgment, so shall I not hesitate to be equally explicit and decided in condemnation, should any district project come be- fore me for review which I believe to be unsound. It is to be remembered, however, that district officers having charge of good enterprises may not present them for examina- tion at all. Moreover, because I may now have written of the Central, the Ferris, or the Alessandro District, that it has a good project, specially because of some certain favorable circumstances or features, it does not necessarily follow that district enterprises which have not all such advantages are not good. The question of water-supply, particularly, is one which has to be considered with absolute independence for each case. Enough water per acre with works of a certain class, cultiva- tions of certain kinds, and soils of such and such grades, might not be enough were these conditions altered. But water-suppl}' problems sometimes admit of solution in ways not at first apparent. Storage of flood waste waters, or even development of underground Sowings, may put a district project in first-rate form, where nothing but conflict with prior appropriators and other interests seemed at first imminent. At the same time, these are problems to be studied, and not an- swers to be jumped at. There is going to be failure in instances of this sort of thing, and consequent disaster, at some places in this State. As to conflicts over water rights, of which so much is said and threatened : unquestionably, a number of district enterprises will have to incur these. But the law anticipates this, and pro- vides for it. The question in each case will be as to the meas- ure of conflict ; its possible influence ; its probable cost ; the ways of avoidance ; the outlook for compromise ; its probable effect on district prosperity, and, consequently, on district credit. I have now reported two districts out of three as having, so far as I can ascertain, a unanimous feeling among their tax- payers in favor of the district irrigation work. But it does not follow that a district having a less harmonious and favorably disposed property ownership has not a good enterprise. Closing Letter. 61 Experience with these developments has shown rue that there is a class of people who resist every advance step it pub- lic enterprise, especially when it comes in a form not altogether familiar to them ; and more especially when it is under guid- ance of their nearest neighborhoods. There are irrigation enterprises in this State whose full re- alization would, under proper guidance and in a thorough way, be cheap at a cost over $50 per acre of lands served under them. There are others which would be disastrously dear at $5 per acre for water, works and distribution. It cannot be judged, therefore, from the costs reported as reasonable for the districts thus far examined, what might be within bounds for other schemes. Several districts appear in these foregoing reports as making fairly complete and systematic business and engineering ex- hibits of their affairs. Other districts may not at once, and without preparation, be able to furnish data for such exhibits. That is no reason why they may not have their engineering plans and estimates, and official accounts, put into equally sat- isfactory form before calling for an examination, however. There may be district schemes in the State which are not on their face, as now organized, as sound as those thus far report- ed on. But such may be susceptible of reorganization. There may be some other good project available for the lands of a district, or a large part of them. And, hence, the poorest ap- pearing districts, even as now organized, and works as now projected, should not, on superficial knowledge, be finally judged by comparison with Central, Ferris, or Alessandro Dis- tricts, as these have been reported. In short, there are many points of this kind which might be mentioned. Each district presents its own problem ; and it cannot be judged from one report what another may or should be. I write this that I may not be misinterpreted, and that I may not, through mistaken inference, be thought to do injust- ice or harm in any quarter. Respectfully yours, WM. HAM. HALL, Consulting Civil Engineer. 62 Attorney? Opinion. SAMUEL M. WILSON. ) RUSSELL J. WILSON. > MOUNTFORD S. WILSON. ) LAW OFFICES OF WILSON & WILSON, 202 SANSOME ST. SAN FRANCISCO, CALIFORNIA, November gth, 1891. To HON. J. W. NANCE, President State Association Irrigation Districts, DEAR SIR. We have, at your request, carefully exam- ined the proceedings of the Board of Directors of the Alessandro Irrigation District, taken by that Board in the Superior Court of the County of San Bernardino, under the " Confirmation Act," passed by the Legislature of the State of California on the 1 6th day of March, 1889, said examination having been made for the purpose of ascertaining whether or not those pro- ceedings conform to the requirements of said Act ; and beg leave to report that we are of the opinion that all of said pro- ceedings are covered by, and are in conformity to, the require- ments of said " Confirmation Act." Respectfully yours, WILSON & WILSON. UNIVERSITY OF CALIFORNIA, LOS ANGELES THE UNIVERSITY LIBRARY This book is DUE on the last date stamped below NOY 6 1902 'D: r 5 RENEWALS MAR 12 APR 03 986 For information as to Bonds, address CHAS. W. GREEN, Murray Hill Hotel, New Yor 824 Hall - r ^iessandro cop. 2 irrigation district. TC 824 C2H14a cop. 2 3 1158 0108 UC SOUTHERN REGIONAL 000 947