The record-union., 1891-08-11
AN IRRIGATION REPORT.

The irrigation district bonds of Cali
fornia placed upon the market in pursu-
ance of the provisions of what is known
as the Wright law have as rule found
no takers. Some few districts have sue
ceeded in disposing of their bonds, but
we repeat, as a rule, the bonds have not
been taken by the market. There are
various objections raised against the
bonds as securities for the repayment Of
money loaned. 1t is claimed for the
bonds that they are the equivalent of a
first mortgage on the land within the dis
trict, created in pursuance of the provis-
ions of the Wright law. This is not true
in any absolute sense. They are not the
equivalent of first mortgage, and the
difference between them and a first
mortgage is quite obvious 10 investors.
In the first instance, the owner of the
land or the maker of the mortgage can be
sued directly by the mortgage and the
specific land sold in satisfaction of a
foreclosure. The holder Of an irrigation
district bond finds that he can get his
money only through process of assess
ment. He cannot sue the owners Of
lands, but he can sue the directors or
trustees of an irrigation district and make
them levy an assessment in accordance
with the law. They may resign if the
irrigation works of the district are un-
popular, whereupon the Board of Super
visors of the county may appoint other
trustees of the district, who in turn may
resign or may refuse to serve.
Completely stated, the difference be-
tween first mortgage on land as between
individuals and mortgage by way
OF irrigation bonds is, that the former
has the land actually and bodily hypoth-
ecated; the latter has the aggregated val
ne of the land embraced within the dis
trict liable for the repayment of his
money, but by processes of indirection,
somewhat remote and obstructed by
many difficulties. The first, then. is
simple, direct and certain. The second is
complex, indirect and obscure. This is
perfectly proper Characterization of the
whole situation, and investors know it.
If the statute popularity known as the
Wright law had provided that the holder
of the bond, or the syndicate of the
holders of irrigation bonds, might sue
directly the owner of any delinquent
property within the district, or in the
event Of failure to assess, which is one of
the dangers besetting the situation, the
bondholders could sue all the property
owners in the district by direct proceed
ings; or in short, if provision had been
made for the foreclosure of the mortgage
created by the bonds against the land, in
stead of their payment through processes
of assessment, the bonds would have
been gilt-edged securities in any market;
at least where the land in its unirrigated
condition was worth the amount of the
bonded Indebtedness.
To meet and obviate all the difficulties
which have obstructed the sale of the
bonds, q device was hit upon of having
an engineer selected.by the bankers upon
whose favorable testimony the bankers
would recommend the bonds to Eastern
investors; to have a single firm Of attor-
neys determine whether the district had
organized in accordance with the Wright
law. This device has been put in prac-
tice by the Central Irrigation District of
Colusa County. William Hammond
Hall was employed to examine the ditch,
and the firm of attorneys, Messrs. Wilson
q Wilson, were retained to give an opin-
ion as TO the regularity of the organiza-
tion. William Hammond Hall has re-
ported. He was called to the stand by
the irrigationists and his testimony is be-
fore the public. It remains now to be
seen whether the'investor viii accept the
testimony of this witness.
The first thing discovered by Mr.. Hall
is that the former estimates of the cost OF
the work were far too low. The first
estimate of the cost of the work was
about 100000. Mr.. Hall estimated il al
$945,OO0 The land to be reclaimed aggre-
gated $4,000 acres, 145, 900 acres of which
are under cultivation for cereals. But
the bonded Indebtedness, that is, the face
of the bonds has interest coupons at
tached aggregating I20 per cent. of the
body of the bonds, or 81, l34, 900, which, Il
added to the principal, makes the in.
debtedness which the land must pay
SPOTS, 900. Mr.. Hall reports the water
abundant, the line of the canal well laid
and all engineering considerations favor.
able to the proper development of an irri.
CATION system.
At this point the bonds are supposed K