Imperial Valley press., 1910-08-20


 portance Being without it any mu- tual corporations other than an irriga- tion district, would be compelled to pay such prices for all things neces- sary to the acquiring of water sys- tenn as could be arrived at by private contract and without any compulsory power to acquire the necessary prop erty at It's reasonable value.
 Other considerations will appear further on.
 3. The third question specifically put by you, is as to whether an lrri- yation district can expend funds which may be raised by bond issues in ac- auiring property in Mexico, or in making necessary Improvements, ex- tensions or protective works in Mex leo. This question raises a number of important considerations
 It seems. to entitle any person or corporation to construct and operate canals in Mexican territory, that the Mexican law requires that a contract, commonly called concession, shall be entered into by the Mexican Gov ernment, granting the right to con- struct canals through its territory, and prescribing conditions and pro- viding for engineering supervision of the system, the expense of which is 70 be paid by the owner of the canal Such concession was made to the Mexican Company; by the first article of that concession, the Mexican Com pany was authorized to carry through the existing canal in Mexican terri tory and through other canals that it might build water to the amount of 284 cubic meters per second, from the water taken from the Colorado river, in the United States, by the California Development Company, and which waters had been ceded by the latter company to the Mexican Company It also authorized the Mexican Company to carry to the lands of the United States, the water to the extent of one-half of it. The second article provides that from the water men, toned in the first article, enough should be used to irrigate the lands in Lower California, susceptible of irri- gation with the water so carried through the canal or canals, to an extent not exceeding one-half the volume of water passing through the canals. Article x, of the concession provides that the Mexican Company in all that refers to the concession should be subject to the inspection of an engineer appointed by the Sec retary of Development of Mexico, and should be obliged to contribute $500 Mexican, per month Ito the expense of such inspection. The contract of concession contains numerous other subsidiary provisions. It also seems that the Mexican law prohibits for eign corporation from holding the title to the physical property of such canal system within the zone of ter ritory which must be traversed by a canal from the Colorado river to Im- perial Valley.
 The California Development Com pany avoided this difficulty by vesting the title to the lands traversed by the canal in the Mexican Company, and taking to itself the ownership of sub stantially all the capital stock of the Mexican Company. In this way it has controlled the management of that company. The general title to this stock, subject to lien as security for bonds issued by the California Development Company is now claim ed to be held by the Southern Pacific Company Through the ownership of this stock, the California Develop ment Company has indirectly man. aged and controlled the Mexican Com pany, subject to the concession granted by the Mexican Government to that company.
 There are then two elements in the problem below the international boun- 1ary line which confronts an irriga- ton district in Imperial Valley, to- wit: The fact that the Mexican law prohibits it from acquiring the phy- sical property of the Mexican. Com pany in the canal system; and the fact that the indirect control of the Mexican canal system through the ownership of the stock of the Mexican Company brings the holder of said