The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-12-09
IRRIGATION ENTERPRISES.
Cause Of the Prejudice Heretofore
Existing Against Bonds
OF That Sort
Question That Must Be Answered
Before the Security
Is Approved.
Plan Proposed by = Financial Newspaper,
American Investme On ts-National
~Irrigating Board.

D0~AS -lr, .7-
The prejudice against irrigation bonds
las arisen partly from losses to investors In
fhat line, for which rascally schemers are
F~esponsibls; partly, however, because their
Eery nature makes il difficult for the east
I'm purchaser TO satisfy himself concerning
the probable safety and profit of the pro-
posed Investment. says American Invest
nents. In loaninR money on mortgages
Falues can be determined by comparison
With actual sales Of neighboring property;
he Understanding power of many other
Investments can be determined by their
past record. But in examining into the
probable success OF nm irrigation enter
prise, certain questions have to be consid-
ered. which can be properly answered only
81 IN expert, after careful examination on
Tho spot which is affected. The success or
failure Of one such enterprise does not Of
tself offer even good guessing ground rsla-
i've to q similar one, perhaps not far away.
rhs suitability Of the land for irriga-
lion: it's fertility, when properly cul-
Fiyated; the cost Of constructing irrigating
works.; the expense OF keeping them in or
der; the permanent income that may be
reasonably expected; the suf1iciency and
bermanency Of the water supply; the acre
age to which water can be supplied; tho
press of settlers to occupy available lands
n that particular section; the proximity of
Failroads; the accessibility Of suitable mar
keta for tho products Of the land-all these.
md many more points, demand careful
Etudy before a decision can be reached.
Evidently such a study cannot be given
10 this question by each investor, thousands
pf miles away. Evidently, too, the state
nents on these points, nude by the men
Who have organized, or are managing the
company whose securities are offered, are
ppen to at least the suspicion of being COL
bred in their own financial interest. Evi-
lently, once more, if the testimony Of per-
sons. known to speak from expert knowl-
bdge, and known also to have no personal
nte ests ut stake, could be obtained, that
estimony, would be regarded by investors
as possessing the very highest value.
la such testimony accessible? Usually
not, at present, and that is why many in
~Eestors do not even care to consider the
merits of an irrigation bond offered them.
The result ia, that more than one projected
work OF this kind, legitimate, necessary
Ind with honest and capable managers. has
ALLEN to the ground through lack of 6nan-
,ial support, and the development Of the
legion to DO affected by it has been matefi-
PLY retarded. Ny 49,
American Investments has a remedy to
suggest for this state of things, in a plan
which will enable legitimate irrig alton
companies to offer to each would-be inves-
tor complete, satisfactory and unbiased
testimony as to the merits of their securi-
les, at small cost to the company and With
put expense to the purchaser Of the bonds.
lore it is: sr
Let there be organized a national irriga-
ion board, which shall exist, not as n bust
+,ess for money-making, but as an associa-
ion to aid in the development Of the "arid
district" The board of directors of this
body must be composed of men of I'M
business capacity, and not themselves
financially Interested in any irrigation COM
pany. Headquarters might be established
n Denver, or any other suitable city in the
district where i, rigation ia necessary. Pos
kibly it might be we'll to divide the board of
directors betwesn two or three leading
tities, in order that NIL rival sections should
pc fairly represented, and that the fullest
Information might be had concerning the
merits of irrigation projects in each local
ty. Caro- should be taken that these direc-
Fors should be chosen from among the
most conservative business men of their re-
bpective cities, and that their names should
bot be connected with any speculative or
toubtful operations. The statements of
buch q board III this concerning a proposed
Enterprise would carry great weight in the
minds of investors. f
The directors, being men largely inter
Psted In the prosperity of their section of
up much time to the affairs of the national
Irrigation board, should DO willing to serve
without salary. Indeed, much. of the use
fulness of the board would be destroyed if
: could be limited that salaries or fees were
he main or even an important object of its
existence. But such men could not, of
investigate personally into the NOR
is of each irrigation security. For this
purpose it would be necessary to have a
ealaried man-call him the irrigation in
perhapa-to whom the work of ac-
tual examination of each enterprise would
committed. His salary must be large
Enough to secure a high standard of ability.
make it most unlikely that his reports
iould be influenced by a bride or any other
whatever, but the truth.
Lastly, he must be a thorough expert on
subjects pertaining to the construction
ind operation of irrigation systems.
Finally, there might be appointed in
bach city and town OF any Importance in
|he irrigated district, one of two consult
|ng directors, who should, of course, be
men of the highest standing in their own
Now, lot us see how tho national irrigat-
ng board would operate. Whenever it was
desired BY any irrigating company to offer
is securities to the public, it would submit
tn W statement of all necessary facts to
he association. The %irrigating inspector
you'd then 20 to the company's property.
IND there would examine minutely into
very point bearing on the value of the Sc
under consideration, being aided
n this by the local consulting directors.
Many of the problems which he would have
% solve have been already mentioned. One
tery important point of inquiry, not yet
would be the character of the men
Interested in the company. Ii they proved
@ DO lacking in principle or of tho too
variety that would condemn the se-
.'urities utterly In the minds of careful in
no matter how sound the enter
rise appeared in other respects.
again. If it appeared likely that
nc primary motive of tbs man.
Of the company was to make large
'rofits on its holdings Of land. and that the
furnishing of irrigation water was only q
means to that end, this would be a feature
lot in favor Of the securities. 1t is neither
'ocessary nor possible to detail here every
which the irrigation inspector would
10 obliged to consider. All may be summed
Up by saying that no should satisfy himself
bout every feature Of the COMPANY and its
which could affect it's stability on
ne permanent value and interest-paying