Water Companies in Yorba Linda
By Eldo West
In California, water companies are usually organized to produce, procure or develop water for irrigation and domestic purposes for an acreage or tract definitely defined in the articles of incorporation. Mutual companies are usually formed.
The powers and duties of the company are regulated by the state and are set forth in the articles of incorporation, which must be approved by proper state authority.
Only members are entitled to receive water from the company. Each member must purchase shares from the company and every share of stock carries with it a right to a certain amount of water, usually agreed upon at the formation of the company. This amount varies with different companies. Yorba Linda’s rule was 1/5 of a miner’s inch to each share. Most citrus growers considered one share per acre to be adequate.
Companies could obtain capital for the expenses of obtaining water, building reservoirs and installing pumps and distributing facilities by sale of their stock to their own members. Or they could sell bonds, secured by a trust deed, lien or other evidence of the indebtedness for which each member was liable in accordance with the number of shares he owned.
Expenses of the company such as power for pumping, maintaining pipe lines, etc. were usually met by direct assessment against each share of stock or by a charge for water used or a combination of the two. In mutual companies the first method is the most common.
Where the water used is suitable for domestic purposes (and so used) an additional charge is collected, based on the amount consumed. A flat rate was charged for each domestic service entitling the user to a certain maximum amount and any amount over the allotment costing extra. But water could be delivered to stockholders only.
Each share of stock entitles its owner to a certain amount of water. While the volume of water obtainable for each share of stock is usually designated by continuous flow it is, in practice, allowed to “accumulate” and be delivered in “heads” of usable size for proper irrigation. A zanjero is employed to supervise the distribution of water to ensure each owner his allotted amount of water and no more.[1]
The company was controlled by a board of directors elected by the stockholders. The directors were limited by the by-laws enacted by the stockholders, and the articles of incorporation.
New companies, owned by the stockholders, with little or no experience in such matters and varying degrees of mentality, were often hampered by factional fights. These subsided as stockholders learned more about the company and its problems.
In some instances the ownership of the water and the distributing system is held by the seller of the land, and water supplied at a pre-arranged price. In such cases the water company or owner becomes a public utility, subject to state control.
Shares of stock, when issued to an individual, were his personal property and could be sold or disposed of as any other property. However, stock only represented certain rights in the company and was liable to assessments for the company expenses.
In some cases the stock was appurtenant to the land, in other words, the water obtained through ownership of certain shares of stock must be used on land designated in the stock certificate. But more often, water could be applied anywhere within the boundaries of the district as set forth in the charter.
The Anaheim ditch, as it was commonly known, furnished water for some parcels of land west of the Yorba Linda Townsite,[2] and there were two or three residences in that section before the developers of the Tract had started grading roads or putting in water mains, Jim Conley being one and the most widely known. He was a dry land farmer, had several teams of good horses and did considerable work on county roads. The development work on the tract – roads and water company pipe lines and reservoirs – furnished him and other ranchers of the neighborhood with work for a couple of years.
Buyers of land were to receive stock in the Yorba Linda Water Co. at the ratio of one share for each acre of land, and each share of stock was to entitle the owner to receive 1/5th of a miner’s inch of water continuously or the equivalent in irrigation heads of whatever size best suited his conditions for irrigating. If a man had ten acres and ten shares of stock he was entitled to use 30 miner’s inches for 48 hours every 30 days.[3]
The water company had two reservoirs, one at about the 200 foot level, and the other close to the 400 foot level, besides a large tank at the pumping plant. At Yorba Linda the water was obtained from wells, which were developed before the pipe lines were put in, and water was given to each section as fast as the delivery system was completed.
The sandy section around the pumping plant was first, the section served from the “big” reservoir next and finally from the “little” reservoir. Such being the case there was no general celebration of the completion and delivery of water. Had the delivery system been finished first, then wells drilled and water obtained, there could have been.
By the second summer – 1912 – people had begun to use considerable water and the Yorba Linda Water Co. had started charging by levying assessments against the stock they had issued with the land – one share per acre. This brought the users face to face with the problem of water cost.
Ranchers striving to meet the interest and annual payments due on acreage they had bought in the new Yorba Linda development were amazed at the size of the latest assessment by the Water Company. “Why so much?”
It was the topic of conversation at the grocery store, the lumber yard and everywhere. What if one couldn’t pay? The notice had stated that in the event the payment was not made when due the owner’s stock would be sold at public auction. This must not happen, water was life to trees and other crops, so pay they must, but they were determined to find out why the cost was so high.
Their demand for an explanation from the directors of the Water Company revealed the existence of a bond issue against the company amounting to approximately $175,000 bearing 6% interest. In setting up the company, the promoters had bonded the company for the entire cost of drilling wells, pumps, pipelines, reservoirs and all other incidental costs and had taken the bonds to reimburse themselves.
This was contrary to their sales talks and printed advertising put out by the Janss Investment Co., selling agents for the property. Buyers were told the purchase price included one share of water stock with each acre and that each share would entitle the owner to 1/5 of a miner’s inch of water. All owners understood they would have to pay operating expenses and up-keep and they did not object to such payments, but to be saddled with a bonded indebtedness contrary to agreement was nothing less than high-handed robbery.
The ranchers were almost unanimous in their claims of fraud, misrepresentation and that assessments to pay any interest or principal on the bonded indebtedness were illegal. Added to this was the accumulating knowledge that the distributing system for the water company was of the cheapest possible construction – light steel pipes that were very expensive to maintain – and trees had not begun to yield so that many of the people were having a difficult time trying to meet their bills.
Before this matter had come up, I had gone to work for the water company,[4] first as a helper on the “water wagon” that installed meters and repaired leaks in the mains, etc. Later I worked as foreman of the crew, which wasn’t any easier work but involved more responsibility.
My first year with the Water Company was a year of hard work. The water pipe installed by the Janss Company was very light steel that was attacked by electrolysis that caused leaks by the dozens. The installation of new meters was also the job of my crew so I had lots of hard work, but most of the time I had two or three men working under my supervision. Just exactly who put me in charge of the work, I can’t remember, but it did give me a chance to learn all about the water system.
In the early days of my work for the Water Company, Myron Quigley was the zanjero. He had a ten acre piece north of the Townsite, planted it to oranges and lemons and built one of the better houses on the tract at that time.
The directors of the water company, trying to placate the water users, gave places on the board to Mr. Quigley and myself, thinking I guess that we would be more familiar with the needs of the company than any other stockholders and at the same time give the stockholders a representation on the board.
The other water company directors consisted of the former owners of the tract and the selling agents or their appointees. We attended meetings of the board that year or the balance of it, which were always held in the Janss Investment Company office in Los Angeles. They were very tame affairs with only routine business being transacted in an orderly manner. There was nothing done we could object to, nor that other stockholders objected to, except the call for assessments, part of which was used for interest on bonds. In other routine matters the board usually agreed, often accepting suggestions from Mr. Quigley or myself regarding local questions. Since Mr. Quigley and I were minority members we could do nothing that would afford any relief from the burden of the bonds and the dissatisfaction among stockholders continued to grow. Meetings were held, committees were named, plans mapped to bring suit against Jacob Stern and other owners and the selling agents, the Janss Investment Company.
The fact that I was selected by the Janss Company did not tend to make me a favorite of the local ranchers, who felt the Janss Company had given them a raw deal regarding the water company status. While I agreed with the ranchers regarding the water stock I did not join in the general condemnation and cussing of everything Janss did.
At the height of the water crisis I received a phone call from the Janss Company office one morning saying that Dr. Janss would like for me to come in to see him the next morning at 10 o’clock.
Well, what was on his mind? Usual business was transacted by one of his sons -- men about my age – why did the old man want to see me? I could not imagine, so had to wait until the meeting next morning.
I had met him before, so needed no introduction when admitted to his office. He greeted me by name, asked me about my family -- how many children I had, their ages and about my hopes for their education, etc. This interest in my personal welfare surprised and alarmed me, what was he driving at? What was he going to expect in return for all this solicitude?
But he wasn’t too long in getting around to the meat of the meeting. How were things going in Yorba Linda? Who were the leaders of the dissatisfied stockholders? In the attempts of the Janss Company to mollify the angry stockholders I could be of much assistance to the Company if I would align myself on their side. The Janss Company needed a friend on the tract that could present their side of the story and defend them locally. And they were in a position to see that their friends were well taken care of. They had a large organization with many openings for capable young men whom they could trust to work loyally for them.
There it was, the cards were on the table. I thanked Dr. Janss for his interest in me and my family, and for his kind offer of a chance to become an undercover member of their group. I assured him that I had always stood with them when I thought they were right and with the Yorba Linda people when I thought they were right. That I, like most of the buyers, expected to get stock in a water company free of debt, and would stand with them on that issue.
With that statement of my position the meeting ended, he had nothing further to offer, so we bid each other goodbye. That was the last time I ever saw Dr. Janss, a very likeable man.
As I thought over our talk on the way home, I wasn’t flattered that he had called me in. What did he think I was? A subservient tool of the Janss Company?
Well, I guess he found out that I had backbone enough to stand by my convictions. I was not displeased with my part in the interview and it is only fair to say that it added a bit to my confidence in myself.
The case was presented to a law firm who advised that the stockholders had ample ground for a suit and they were hired to sue for cancellation of the bonds.
The case was tried in the Santa Ana court and a stipulated decision given by the judge granted the stockholders practically all that they had asked for, including canceling the bonds. And the ranchers would take over the management of the water company.[5]
In the meantime, changes in company personnel had boosted me to the top of the list of employees. Mr. Quigley was a victim of cancer of the stomach and had to quit his job, and lived only a few months afterward.
The ranchers elected directors and took over management of the company. Interest charges were eliminated, but costs were still high and the orchards that had been planted were not old enough to produce anything to help meet the costs. So the water company was still the big issue in Yorba Linda – everybody had to use water and it cost money – everybody thought he could run the water company much more efficiently and cheaper.
As an illustration, after the ranchers had taken over management, Carl Seaman was elected secretary and I was superintendent. The telephone at the pumping plant was in the pumper’s house and whenever it was necessary to call the pumper, his wife would have to answer the phone then go across the road to call him. When she happened to be out it would be impossible to reach the pumper by phone. To remedy the situation I asked the phone company to install a loud bell in the pumping plant – 35¢ per month.
When the first bill came in for approval by the board, Carl Seaman, to make a show for economy and managerial ability asked by what authority I took it upon myself to order this extra expense for the company to pay. It was a small matter any way you look at it but was the biggest thing he could find to criticize so he jumped on that.
The water company expenses and affairs were an issue between pros and cons for years until returns from crops began to pay the bills and ranchers learned that expenses went on under whatever management.
In the early days the annual meetings of the stockholders were the big event of the year and packing house meetings holding second place. I remember a meeting in the schoolhouse where Gene French was president of the water company and Howard Barton was vice president. After a lengthy discussion of company affairs and some disgusting tactics on the part of the minority, Gene quit the chair and walked out of the meeting. This was just what the antis wanted and they began to demand that the meeting proceed to elect a new chairman. I jumped to my feet and read a by law which provided that in the absence of the president the vice president should act, insisted that inasmuch as the vice president, Howard Barton, was present that he assume his duties and take the chair. He was a big man, with a strong voice and a willingness to act, so he took charge and soon restored order and had the meeting finish their work without further disturbance.
Notes
[1] Early American settlers in Southern California borrowed the Spanish word for ditch-tender, but many could not pronounce it. “Sand-carrow” was a common mispronunciation.
[2] Portions of the Anaheim Union Water Company irrigation canal can still be seen in the Santa Ana Canyon. The easiest stretch to access is near the Susanna Bixby Bryant Ranch Museum at the west end of Pomegranate Road.
[3] A “miner’s inch” was a common measurement for water in early California; it was equivalent to about ten gallons per minute.
[4] In April 1913.
[5] For the conclusion of the lawsuit, see the Santa Ana Register, July 20, 1914, and the Los Angeles Times, August 21, 1914. See also the Yorba Linda Star, October 17, 1947.