TWENTY-EIGHTH FRUTT-GROWERS ? CONVENTION. 41 



gation purposes. This law was a necessity, but it had the effect of 

 stopping the investment of money in water companies on that basis. 



It was at this stage of the proceedings that the writer suggested a 

 plan for the formation of mutual water companies on a co-operative 

 basis. Such a water company was to be incorporated for the purpose 

 of supplying water to its stockholders only at cost. No one could get 

 water from such a company except he was a stockholder, and such cor- 

 poration could declare no dividends, because there would be no profits. 

 Each person owning land to be irrigated by such company must take 

 one share of stock for each acre of land to be irrigated, and such land 

 should be described in his certificate of stock. Good attorneys said 

 that such a company could not be legally formed, but they were mis- 

 taken. 



The first water company formed under this mutual plan was incor- 

 porated in 1875, for the then new settlement of Pomona; but on account 

 of the financial panic of that year, which bankrupted the people hav- 

 ing that enterprise in charge, the company went out of existence and 

 other people reorganized the system. 



This mutual water company plan was the third stage in the legal 

 machinery plans for the ownership and management of irrigation works. 

 Under this mutual water company plan, the State need not supervise 

 the rates to be charged the people for water, as the people would supply 

 themselves with water at the lowest possible price, for they were simply 

 helping themselves to the waters from the stream, and the mutual water 

 company was the legal machinery through which this was done. 



In 1881 the Redlands Water Company was incorporated on the 

 mutual plan basis, and that company is to-day the oldest mutual water 

 company in the State. 



Then followed the Etiwanda Water Company, which was incorpo- 

 rated in 1882, and the San Antonio Water Company at Ontario, which 

 was incorporated in 1883. 



In 1884 the Riverside Water Company was formed on the mutual 

 plan to succeed the Riverside Land and Irrigating Company, a corpora- 

 tion whose stock was practically all held by two individuals — a corpora- 

 tion that was rapidly becoming bankrupt, that was ruining the fair 

 prospects of that model settlement, and bringing financial distress upon 

 its principal stockholders. 



Mutual water companies have usually been formed by moneyed men 

 and real estate operators who would secure a tract of land and a water 

 supply; then they would construct the irrigation system and convey it 

 to the mutual water company, taking the stock of the company in pay- 

 ment therefor. They would then subdivide the land and sell it at a 

 price sufficient to cover cost of land, improvements, the water system, 

 and what they might consider a fair margin of profit. They would 



