THE PROGRESS OF WESTERN AMERICA. 



141 



works, the State fixing the maximum price of water 

 rights. When these have been paid for, the settlers 

 will own and conduct the works, but this cannot occur 

 until the land is substantially settled. The two meth- 



D. M. FROST, 



President Kansas Irrigation Board. 



ods come to the same result in the end, but it would 

 seem that the Wyoming plan ought to avoid the pit- 

 falls which have been encountered in California. If 

 the decision of the United States Supreme Court 

 should prove favorable to the Wright law, the market 

 will probably open to the sale of District securities. 

 Then, if people will study the California experiences 

 and avoid the mistakes that have occurred in several 

 instances, and, above all, if they will elect honest and 

 capable business men to directorships, it ought to be 

 possible to utilize the new district legislation to ad- 

 vantage. 



Cause One of the worst blows that irrigation 

 R?versMe bonds have received in a long time was 

 Failure, the failure of the Riverside Water Com- 

 pany, of California, last January. This failure was 

 construed to the injury of both private and public 

 securities. Riverside is nearly twenty-five years old ; 

 its lands are completely settled and very highly im- 

 proved; it is constantly cited as the most striking in- 

 stance of the prosperity of the irrigation industry. 

 In the face of the failure of such an enterprise it would 

 seem rather difficult to make a respectable argument 

 for the securities of a new company. So many in- 

 quiries about this matter have been addressed to THE 

 AGE that it seems altogether best to publish the fol- 



lowing letter from Mr. George Frost, formerly presi- 

 dent, and now receiver, of the Riverside Water Com- 

 pany: 



I do not think the fact that this company has been unable to 

 negotiate its securities, and from that cause has been unable to 

 meet its floating .indebtedness as it matured, and which everyone 

 in these times of financial stringency has demanded, is any ar- 

 gument against irrigation bonds. 



The primary cause of the financial embarrasment of this com- 

 pany is, in my opinion, to be found in the pernicious habit of 

 people spending money before they have it; or, in other words, 

 in improving the system upon a floating indebtedness at high 

 rates of interest, instead of having placed its bonds at reasonable 

 rates of interest, and with a definite time of payment before ex- 

 penditure was made. When money became scarce, persons hold- 

 ing our obligations required money. The very reason they re- 

 quired it was a good reason why we could not sell our bonds, and 

 the result was inevitable. It is true that the lands under the 

 system are valuable; but that lends no value to the water stock, 

 because the lands are in no way liable for the indebtedness of the 

 Water Company, at least for any indebtedness made previous to 

 three years; and the fact that the water is appurtenant to the 

 land and cannot follow the stock in case of a sale, causes no alarm 

 to the water user in case of an assessment and sale of this stock. 

 This, instead of being an argument against the sale of District 

 bonds, is one of the best to be advanced in their favor; that is, the 

 lands of the district are bonded for the payment of the bonds! as 

 well as the water system, while in our case the system and the 

 property of the company only are bonded. I think the Riverside 

 Water Company will be enabled to arrange its affairs and get'out 

 of the hands of a receiver within a few months; at least it is to 

 be hoped that such will be the case, since its plant and income 

 are sufficient to guarantee such an event in reasonable time. 



J. S. EMERY, 

 Director Agricultural Experiment Station, Bozeman, Montana. 



The Bear 



Valley 

 Outcome. 



^ ^ s near ^y eighteen months since the 

 Bear Valley Irrigation Company of_Cal- 

 ifornia, went into a receivership, and it 

 is over a year since an arrangement was concluded 

 at Los Angeles by which it was supposed an effective 



