Cooperation in Irrigation 263 



any one. A mutual company is a special form of private 

 company in which the stock represents water rights and 

 is owned entirely by those to be served, the classification 

 being one of general custom rather than a legal distinction. 

 Most of the mutual companies originated hi one of three 

 ways: some grew out of the failures of state irrigation 

 districts; others were promoted and fostered by land 

 companies; and still others were organized by settlers 

 directly, without the aid of other agencies. 



"Many districts were organized in Southern California 

 soon after the passage of the State Irrigation District Law, 

 and most of these failed, because of insufficient water 

 supply, mismanagement of funds, defects in the law itself, 

 and various other reasons. Where the districts had been 

 for worthy projects, mutual water companies were or- 

 ganized to succeed them, the companies taking over the 

 property of the districts at its value. 



"It is probable that a majority of the mutual water 

 companies originated subsidiary or promotion companies 

 having lands to sell. The promotion or parent companies 

 were usually known as 'land and water companies.' Their 

 methods were to acquire large tracts of land, often Spanish 

 claims, and subdivide these for sale to settlers. They 

 also developed and provided water for the irrigation of 

 the land they had for sale. They then caused the or- 

 ganization of mutual water companies, the latter as a rule 

 having only a few first settlers, perhaps stockholders or 

 agents of the parent company, as the original members. 

 The usual method was to turn the capital stock of the mu- 

 tual company over to the parent company in exchange for 

 the water system. The system would include the water 



