Los Angeles herald., 1891-08-23
Points Which Are Well Worthy
of Consideration.
Features of the Act Which Make
Investors Shy.
A Law Beneficial as Whole. But
which Needs Some Changes-The
Opinions Of q Noted Expert
on the Matter.
TBY GERvAIsE PURCELL, ASSOCIATE Mice.

under the title of "an act to provide
for the organization and government OF
irrigation districts and to provide for
the acquisition of water and other prop
erty, and for the distribution of water
thereby for irrigation purposes" This
act is popularity known as the Wright
act from the name OF its introducer.
That this act has undoubtedly
given an immense impetus to
the development of our couu-
try no person of observation can
deny. But whether this is in the main
wholly beneficial impetus or not re-
mains yet to be demonstrated. That the
general plan proposed has merits OF a
very high order is indisputable, yet the
outcome seems to suggest to the think
ing public grave doubts as to its utility
in its present form. Lurking amongst
the various clauses of this act and its
amendments are many dangers that a
close analysis of them bring to the front
and call aloud for a slower adoption of
this panacea.
That these dangers are fully appre-
ciated by our deepest and most conserv-
ative thinkers is evidenced by the
fact that of the $lO,000,O00 of bonds
voted only $4,000,000 have actually
been taken up. This means that capi-
tai hesitates to endorse the security as
first class and shows that it still remains
to be demonstrated that the act is con-
stitutional throughout. 1t has been
urged by its advocates that this class of
security is new to investors, and that in
time it will win favor as it becomes
better understood. Whilst it is true
that there is nothing more timid than
million Of dollars, unless it be two mil
lions of the same coin. still those who
are brought in contact with investors in
public works securities know that the
ordinary investor only asks
for the Endorsement OF his banker as to
the merits of a particular class of secu-
rity, to plunge in, regardless of personal
investigation, for which the most of us
have neither the time nor capacity.
Realizing this fact, sellers of bonds
cry aloud and with no small clamor for
the bankers of this state, to so indorse
these bonds, and thus create demand
for them. That the pressure brought
on these institutions has been great and
well directed is well-known ,and too much
credit cannot be awarded to our bank
officials for their conservative action.
1t goes:without saying. For once let a
security be foisted on the public in in
considered haste, and with such an en-
dorsement become an accomplished
fact, and then let the basis on which
the endorsement is made prove falla-
cious, then financial crisis would be
brought about sufficient to give our
golden state set back OF huge proper
tions and far-reaching into the future.
That the constitutionality OF the act
can only be tested by land owner in
oae of these districts contesting the
right OF an irrigation board
to mortgage his property, nolens
volens; and the carrying of such case
to its final issue before the supreme
court is, the writer believes, the only
method by which this form of security
can be made known for what it really is.
In special cases where the bond vote is
unanimous, and if it could be proved
that each freeholder voluntarily con-
sented to the mortgage, presumably, he
can be legally held to his act.
And this brings us to what seems
flaw in the construction of the act per Sc,
to-wit, the method of voting. Ehe
act says: "Such election shall be con-
Quoted in accordance with the general
election laws of the state" In plain
language, every individual resident in
the district, although his ownership of
property be nil, can vote to mortgage
the helpless freeholder. That this is an
obvious injustice should need no dem
onstrating, yet there are those that con-
tend that this is is only tax. and
therefore every one is entitled to vote
on it. But it is in no sense a
tax for the benefit OF the body
polite, but rather an enforced dictation
to the individual as to how and when he
shall improve his property; and totally
regardless of his convenience. In addi-
tion, that this method of voting by null
Gtude means, as a rule, the election of a
board whose responsibility and interest
does not tend towards economy or insure
business capacity, is evident and may,
and possibly has, resulted in the making
of contracts for water so ironclad in
their terms that trouble and financial
ruin may result from their enforcement.
Water property may be bought with
cHnds before sale is ensured for the
bonds allotted to cover the expense of
distribution systems, and then district
may find itself saddled with mortgage
to pay for water it may never be able to
avail itself Of.
Again, tile Title 10 tne water IN une
vendor is very difficult matter to prove,
and calls for specialist in water laws
to determine; yet in how many
cases is this precaution taken
That many districts furnish a
security that is of the higher order no
one knows better than the writer, yet
the very merits possessed by these tends
to give fictitious value to others that
possess no merit of any kind and which
could never justify a business man in
investing his money in their bonds.
That our beautiful state is on the eve,
if not already well into, another period
of financial prosperity is patent to all ;
and hence it has seemed we'll to the
writer, and very oportune, to warn in
vesters at home and abroad from plung-
ing their money into pits from which
they may never recover it; and to say a
word in season to ourselves against re-
peating the errors of judgment we COM
mitted four years ago.
As country Southern California Of
fers more channels of profitable invest
ment than most any other land under
the sun, but for all that we must
not suppose that caution and
business tact can be thrown
aside, and investors in irrigation