Imperial Valley press., 1910-11-05

The Southern Pacifics claim against the California Development Go. for money loaned is $2,402,214, which does not include the cost of the last closure of the Colorado, for which the South ern Pacific has a claim of $1,600, 900 against the United States. The South ern Pacific has a judgment against the c. D. Go. for $1 ,460, 900 and judgment against the Mexican company. The Southern Pacific also holds as security for it's claims virtually all of the cap ital stock of the c. D. Go. and the Mexican company and a large block of bonds. Having control of both companies through directors named by itself, the Southern Pacific, before bringing action to have a receiver appointed for the mortgaged property of the C.. D. Go. for it's own benefit as mortgagee, caused most of the porta- ble property and all the funds of the c. D. Go. to be assigned to itself and placed in the hands of w. J. Doran, trustee. The value of the property assigned is shown by the books of the c. D. Go. to be $92S,0O0 The judg- ment against the c. D. Co., and the assigned property amount to only $14000 less than the total of the Southern Pacific's claim. The judg- ment against the Mexican company is secured by an attachment on all it's property including 75,000 acres of land (Talued at S35 an acre or $2625,000, which is more than the total of the Southern Pacific's claim.
 w. J. Doran, trustee, also holds cer- tain moneys collected for water rent als that should have been turned over to the receiver, and the water rentals paid by the water-users in Mexico are held by the depositario, or Mexican receiver, who was director of the Mexican company and is virtually an employe of the Southern Pacific. The depositario and w. J. Doran have de clined to pay to the receiver of the c. D. Co., any of the money collected from the water-users in Mexico.
 Included in the portable property Of the c. D. Go. seized by the Southern Pacific before the appointment of a receiver are two dredges in the Alamo, and the receiver has been obliged to pay rent for the machines at the rate of $7,000 a year for one and $10 day for the other. When the receiver took charge of the c. D. Co.'s property, he found an empty treasury and nothing but the bare bones of the concern, from which the Southern Pacific had stripped the last shred of meat. He was obliged to issue certificates and sell them to get money for operation and maintenance and for the con- |. struction of levee to save the system from possible destruction by the JuEe flood of 1910. The Southern Pacific bought the first lot of certificates, and the receiver had reason to believe that the Southern Pacific, having ab- soute control of both companies and all their property and revenues, would advance money required to put the canal system into proper and safe working order, but suddenly the Southern Pacific changed it's policy and refused to put up another cent leaving the receiver adrift without sale or rHdder in an uncharted sea.
 Receivers Predcament.
 That is the story of the receiver ship as brought out at the hearing in the Superior Court through the teSti- mony of the auditor of the c. D. Co.,. and of Receiver Holabird. It sheds light upon the efforts of the receiver to obtain assistance from the water users in keeping up the system and protecting the valley against shortage of water. By leaving him without the aid he had a right to expect, the Southern Pacific practically compelled the receiver to harass the people Of the valley and threaten to raise water f< hnin iGt g ance in maintaining the canal system. D Receiver Holabird testified that the Hweir dam in the Colorado was a tenn pOrary eXpedient to get water into the canal and that it would be necessary to remove it before the next flood, as it might divert the course of the river and do grea, damage Co either the Imperial Valley or the Yuma Valley canal system. He believed dredging of the canal below the headgate would be more effective than replacing the weir, and he had been notified that permission to replace the weir next year would not be granted.
 MT. Britt asked questions indicating an assumption that the receiver was intending to spend money for the par
 ticular benefit of waterusers in Mex ico Col. Holabrd said ne had nc plans of that sort, but should respect the contract requiring the delivery of water in Mexico He was not aware that the contract provided that water rentals derived from Mexico should be applied to maintenance of the system He knew nothing of the Southern Pa cifie's policy in the matter of rentals and he did not know the motive