The herald., 1898-10-31
Mr.. Waters Affidavit Makers

To the Editor of the Los Angeles Herald:
Who are the gentlemen whose atfidavits are
published in the Times of the 2Sth inst.
to vindicate r. j. Waters conduct OF the
Bear Valley Irrigation company!
The gentlemen who rushed to the defense
of Mr.. Waters in the Los Angeles Times
of the 2Sth inst, by making their personal
affidavits to excuse him from all blame in
connection with the conducting of the Bear
Valley Irrigation company and to show that
he was opposed to paying OF unearned dlvi-
dends are +. +. Hotchkiss, Henry l.. Will
liams and G. Il. Harpham. The two first
named were both directors and stockhold-
ers of the Bear Valley Irrigation company
during the time it was being looted by the
payment of nearly 100000 Of unlawful and
unearned dividends. They were both pres
ent at the annual meeting of such company
held March |, 1892, at which the printed re-
port of X. j. Waters, general manager, was
made to the stockholders of the company.
The minutes of that meeting show that
such report was read, received and ordered
filed and adopted without protest or OPP
position from any one present. This report,
among other things, stated "the income OF
the company has been so exceptionally
large that ample provision can be
made for the payment of the divi.
dends upon the preferred stock. of
per cent and on the common stock of
Is per cent annually" and further stated
that ''the water supply which this company
has at the present acquired is sufficient Tor
the ultimate irrigation of 250,00O acres, al
lowing for a succession of dry years"
These gentlemen knew, or should have
known, that all of these statements were
absolutely false and misleading, and that
the company had never made any surplus
earnings, and that it had never been justti-
fed in paying any dividends. They knew
that the company did not have water
enough to irrigate as much as 10000 acres
of land. Yet they approved OF such re-
port and made no protest against its be-
ing used and distributed to induce parties
to purchase the companys stock at inflated
prices. Being thus tarred with the same
stick as Mr.. Waters, they are Of course
compelled now, in self defense, to uphold
Mr.. Waters course. The other affidavit
maker, G. Z. Harpham, stated that he was
ganization until the month of November,
1893; was thoroughly acquainted with the
books, records and financial management
Of the. company. Such being the case, he
knew of the Waters circular above men,
eioned, and that Mr.. Waters favored the
payment of these enormous dividends that
were initiating the value OF the
pany he should have protested against the
statements contained in it, and against the
course it outlined and should have attempt
ed to prevent it's distribution. Not hav-
ing done so, in self-defense he must now
uphold Mr.. Waters course.
All of these gentlemen must have known
of the issue and extensive distribution of
financial agent, dated November II, 1891,
which upon its face stated that it had re-
ceived the Endorsement of K. j. Waters,
general manager of the Bear Valley Irriga-
tion company. That circular, among other
things, stated that the Bear Valley Irriga-
ton company had securities in its
dividend fund amounting to near,
ly $l,50O0OO that could be realized
on readily as needed for dividends;
pay ID per cent annual dividends on its
common stock of $3,OO0,OOO; that this rate
could be maintained continuously, and that
the purchasers of this stock were getting
an exceptional investment, combining the
two elements of absolute safety with high
rate of regular dividends.
1t is not fair that Mr.. Waters case should
be tried upon ex-parte affidavits of inter
ested parties, who, from the records, seem
to be almost as deep in the mud as he is
in the mire. Mr. Waters should come forth
and confront his record, as shown by the
minutes of the Bear Valley Irrigation com
pany, and nothing short of this will satisfy
the people.
As to whether or not Mr.. Waters owned
more than one share of stock in the Bear
Valley Irrigation company is entirely inl-
material, if it be shown that he was large
owner in some one or more of the three
companies that owned the control of the
Bear Valley Irrigation cOmpanys stock
In view of the fact that the records of the
company show that Mr.. Waters was di.
rector and either the head of the financial
department or general manager Of the com
pany during the whole time that nearly
s6O0 900 of uuearned dividends were being
paid to the stockholders and that he ap-
proved the issue and distribution of crcu-
lars in which such dividends were not only
promised to be continued, but were in
creased, it is the height of folly for either
Waters favored safe, conservative course.