The entry gives the two telegrams of 20 December 1906 on which the second closing turned. This piece gives the whole exchange as the President sent it to the Senate three weeks later, with the papers that went with it, and follows the money afterwards through three Congresses. Everything quoted here is from Senate Document 212 of the 59th Congress, second session, unless it says otherwise.
The first telegram
The second break came on the night of 7 December 1906. On the thirteenth the people of the Imperial Valley met at Imperial and subscribed $950,000 they did not have, and the same day Edward Harriman wired the White House from 120 Broadway, New York.
He told the President that “some 800 feet of levee in the river bottom has been washed out and a new channel, which is rapidly deepening, has been cut and is now carrying about one-fourth of the discharge of the river to the Salton Sink, and within a few days will probably be carrying the entire discharge of the river.” The river could be dammed again “within sixty or seventy days on the plan which proved successful in November,” but his engineers considered that useless unless the levees were given subsurface protection fifteen feet deep for about twenty miles, at about $3,000,000. The Southern Pacific, he said, had spent about $1,000,000 on the river and about as much moving and protecting its tracks. If the river was not checked the valley would be flooded and the government’s Laguna dam destroyed. “In view of the above it does not seem fair that we should be called upon to do more than join in to help the settlers.”
Theodore Roosevelt’s draft reply of 15 December is two sentences. “Referring to your telegrams of December 13, I assume you are planning to continue work immediately on closing break in Colorado River. I should be fully informed as to how far you intend to proceed in the matter.”
Harriman answered on the nineteenth. His engineers advised that closing the break and restoring the levees could be done “most quickly and cheaply,” if begun at once, for $300,000 to $350,000. “The Southern Pacific Company having been at an expense of about $2,000,000 already, it does not feel warranted in assuming this responsibility and the additional expenditure which is likely to follow to make the work permanent besides the expenditure which the company is already undergoing to put its tracks above danger line. We are willing to cooperate with the Government, contributing train service, use of tracks and switches, use of rock quarries, train crews, etc., and the California Development Company will contribute its engineers and organization, the whole work to be done under the Reclamation Service. Can you bring this about?”
The twentieth
The President’s answer of 20 December is the one the valley learned by heart. “Replying to yours of 19th, Reclamation Service can not enter upon work without authority of Congress and suitable convention with Mexico. Congress adjourns to-day for holidays. Impossible to secure action at present. It is incumbent upon you to close break again. Question of future permanent maintenance can then be taken up. Reclamation engineers available for consultation. That is all the aid that there is in the power of the Government to render, and it seems to me clear that it is the imperative duty of the California Development Company to close this break at once.
“The dangers ultimately due only to the action of that company in the past in making heading completed in October, 1904, in Mexican territory. The present crisis can at this moment only be met by the action of the company which is ultimately responsible for it and that action should be taken without an hour’s delay. Through the Department of State I am endeavoring to secure such action by the Mexican Government as will enable Congress in its turn to act. But at present Congress can do nothing without such action by the Mexican Government.
“This is a matter of such vital importance that I wish to repeat that there is not the slightest excuse for the California Development Company waiting an hour for the action of the Government. It is its duty to meet the present danger immediately, and then this Government will take up with it, as it has already taken up with Mexico, the question of providing in permanent shape against the recurrence of the danger.”
Harriman’s reply went the same day. “Replying to your telegram of this date, you seem to be under the impression that the California Development Company is a Southern Pacific enterprise. This is erroneous. It had nothing to do with its work or the opening of the canal. We are not interested in its stock, and in no way control it. We have loaned it some money to assist in dealing with the situation. What the Southern Pacific Company has done was for the protection of the settlers as well as of its tracks, but we have determined to move the tracks onto high ground anyway. However, in view of your message I am giving authority to the Southern Pacific officers in the West to proceed at once with efforts to repair the break, trusting that the Government, as soon as you can procure the necessary Congressional action, will assist us with the burden.”
And the President, the same day: “Am delighted to receive your telegram. Have at once directed the Reclamation Service to get into touch with you, so that as soon as Congress reassembles I can recommend legislation which will provide against a repetition of the disaster and make provision for the equitable distribution of the burden.”
Who owns the company
The President did not let the disclaimer stand. On 2 January 1907 he wired Harriman again. “In your telegram of December 20 you state that the Southern Pacific Company is in no way interested in the California Development Company and in no way controls it. I am informed that about one year ago you or your employees, acting for the Southern Pacific Company, obtained possession of a majority of the stock of the California Development Company, and that you or your employees elected the present officers and now direct the policy of the company. Before I communicate with Congress it is essential that I have a direct statement as to your control of the California Development Company. Do you or your employees or men under your direction or control of the Southern Pacific Company hold or control the majority of stock in the California Development Company? Do you or your employees control its principal officers and its president or directorate and dictate its policy? If so, what is to be the attitude of the California Development Company toward Government aid in this matter?”
Harriman, who was ill in bed, answered twice that day. The second telegram said that a copy of the contract had been found in the New York office, that the Southern Pacific had lent $200,000 in June 1905 against 6,300 shares pledged with a trustee, with the right to select three directors, one of them president, “in order that we might supervise and keep check on the expenditure of the money lent by us,” and that the railway was “ready to transfer that position to the Government immediately under such conditions as you may deem fair, as we have never had any other purpose than the protection of the settlers.” The control, he was informed, lay with Rockwood and his associates and the estate of Heber, “none of whom are connected with the Southern Pacific Company.” “I am dictating this in bed, but hope to be out in two or three days.”
The President’s reply of 3 January is the government’s account of the company. “My information from West is to effect that Southern Pacific has claims against California Development Company aggregating $1,800,000. California Development Company has outstanding bonds of $478,000, and has sold water rights for almost 200,000 acres, requiring expenditure of several million dollars to provide permanent supply of water for these rights. … Its assets are lands costing $31,000, canals worth quarter million, notes of settlers $170,000. Principal officers or stockholders now being sued for misappropriation of about million dollars of company funds which should have been used for protective works. Are these statements approximately correct?” Harriman answered that he had no knowledge of the assets or debts, that the railway’s relation to the company “is only that of creditor,” and that he had not meant to ask the government to assume any obligation of the Southern Pacific’s.
The company’s own treasurer, W. J. Doran, had already written the figures down for the Reclamation Service on 26 December: the railway had advanced $1,100,000, with $500,000 to $600,000 of bills for the autumn’s work not yet presented, and the tangible assets “when analyzed shrink to almost nothing.” Randolph, asked by Walcott whether the company could build and maintain its works, answered from Tucson that it could not control the river, that it could supply the valley and pay its debts if relieved of the river, and that it could be turned over to the government with the river under permanent control.
The message
With these papers the President wrote to Congress on 12 January 1907, while the second closing was in progress. Its recommendation was that the Southern Pacific “must continue its work to close the break and restore the river to its proper channel,” that the United States should then take charge, make the protective works permanent, and be repaid out of the rise in land values; that the Reclamation Service should be authorised to build an irrigation project for the Imperial and lower Colorado valleys, acquiring the company’s rights “upon such reasonable terms as shall protect the interests of the Government and of the water users” and obtaining from Mexico the right to carry water through that country; that $2,000,000 should be available for the permanent work; and that “the question as to what sum, if any, should be paid to the Southern Pacific Company for work done since the break of November 4, 1906, is one for future consideration; for work done prior to that date no claim can be admitted.” If Congress declined, “it must be inferred that it acquiesces in the abandonment of the work at Laguna.”
Walcott’s statement, attached, added a sentence about the bank: “any cutting in this bank of soft mud at any such points will sooner or later be a source of danger and disaster to the Imperial Valley and to the lands along the lower Colorado. No such artificial cutting should therefore be permitted.”
Senator Flint of California introduced the bill for $2,000,000 immediately after the holidays. It passed the Senate. In the House the member for the valley’s district opposed it at the request of his constituents, who, Cory wrote, “with very few exceptions” objected to it, “preferring the existing irrigation arrangements to those which would follow under the Reclamation Service, and desiring governmental assistance in river protection work, and in that only.” The bill failed.
The claim
The railway’s bill came the next year. H.R. 18907 of the 60th Congress proposed “to reimburse the Southern Pacific Company the amounts expended by it from December first, nineteen hundred and six, to November thirtieth, nineteen hundred and seven, in closing and controlling the break in the Colorado River,” and appropriated $1,663,136.40. The House Committee on Claims began on 24 February 1908; Maxwell Evarts, counsel to the Harriman lines, the railway’s accountant and Cory came with the vouchers. “President Roosevelt was frank and open in urging the justice of the claim,” Cory wrote, “but, of course, was not advised as to whether such amount of money had been expended. Everyone else, however, seemed to be very much afraid of the matter.”
The committee asked the Secretary of the Interior, James Garfield, to have the Reclamation Service’s engineers investigate, and was told there were no funds for that kind of work. The President wrote to the chairman on 11 March that he had asked Garfield, Newell and Walcott to report what the government “as a matter of moral and equitable obligation” should pay, and that “it was an act of justice to deal generously in the matter, for the railroad, by its prompt and effective work, rendered to a threatened community a notable service which could in no other way have been done.” Evarts agreed to pay for an audit by Grunsky, lately the Secretary’s consulting engineer, who with the American Audit Company of New York reported on 1 April: the structures were adequate and efficient; more protective work would be needed; charges before 7 December 1906 and after 21 July 1907 were not properly part of the work the telegrams called for; the daily records of carloads from 27 January to 18 July were a reasonable check on the bills; cost plus ten per cent was a fair basis; freight should have been charged at half a cent a ton-mile and not at tariff; and the net total, so corrected, was $1,083,673.97 without interest.
The three officials’ report, dated 17 March, reviewed the telegrams of 19 and 20 December and concluded: “Under the circumstances, we do not feel justified in attempting even in a rough way to approximate the burden, other than to state that the principal beneficiaries are six in number: (1) The settlers in the Imperial Valley; (2) the Southern Pacific Co.; (3) the California Development Co.; (4) the Mexican Corporation; (5) the Republic of Mexico, and (6) the United States. Not considering the settlers in the valley, we have five distinct entities among whom the burden might be distributed more or less equally. Thus, a rough estimate might apportion to the United States 20 per cent. of the money expended to reimburse the Southern Pacific Company for the actual expenditures of repairing the break in Mexico.” Cory’s comment is worth setting beside it. The valley’s land interests, he reckoned, were two thirds of the property that had been in danger; the railway about a sixth; the United States, through the Laguna dam, about a sixth; the two companies nothing, being bankrupt; Mexico nothing, its interests being prospective. “Just why this Committee eliminated the land owners and then considered the remaining five entities as being equally concerned has always seemed remarkable, especially because, when two years later another call for help from Imperial Valley came to President Taft, Congress at once appropriated $1 000 000 to protect the land owners primarily and almost exclusively.”
The committee did nothing until Congress adjourned. In the next Congress the bill came back in the Senate as S. 417, “the amount cut to $773,647.25, or 71.4% of that reported by Mr. Grunsky,” and passed. The House Committee on Claims reported it favourably, under pressure that Kennan documents: Taft’s first message to Congress in 1909 (“the equity of this claim is manifest, and the only question involved is the reasonable value of the work done”), and his letter to the chairman of 16 January 1911: “I do not know what amount is just, but I do know that that company came to the rescue of the Government at the instance of President Roosevelt, and that there was an implied arrangement under which they were to be compensated.” Twelve days later five members of the committee, Goldfogle, Kitchin, Candler, Shackleford and Adair, filed a minority report. They did not think “there was any legal, equitable, or moral obligation on the part of the Government to pay the railroad company any amount whatever for closing the break,” since the money had been spent “neither at the request of the Government nor for its benefit”; the appropriation would be “purely a gratuity, a gift of the people’s money to the Southern Pacific Railroad Company.” “We oppose this proposed gift to the Southern Pacific Railroad Co. as well as all other gratuities to private enterprise.” The bill was never voted on. Kennan, writing in 1917, said that it had been “repeatedly recommended by two Presidents” and supported by the whole State of California, and that it was unnecessary to comment: “The barest recital of facts is eloquent enough.”
What the engineers made of it
Elwood Mead, who directed the Department of Agriculture’s irrigation investigations, put the matter into the Society’s discussion of Cory’s paper, and Cory quoted him back in his closing as having found the most valuable part of the paper precisely in the “mass of legal and financial entanglements” that another discussant wished he had left out. Mead’s verdict on the government: “It was the duty of the State or Nation to take charge, and provide the money and men needed to restore the river to its former channel. Apparently no one in authority was interested; the State Government only considered the matter long enough to write a letter to the President, and the President, having Congress on his hands, shifted the responsibility to the head of a railroad company; and it was not until the railroad company took charge that we have the first refreshing example of generosity and public spirit. Nothing could have been finer than the action of Mr. Harriman.” The whole enterprise, he said, showed “an utter lack of public direction and supervision.”
The joint commission with Mexico that the President had promised was appointed in May 1908 and never held a formal meeting; the Mexican commissioner submitted a memorandum proposing joint investigation and a treaty, and the American one could not find the time. “There seems to be no doubt,” Cory wrote in 1913, “that the Mexican Government has been, and is, not only willing, but anxious, to arrange for a satisfactory joint control of the Lower Colorado River, and that the responsibility for nothing definite having been accomplished in this direction, in large measure at least, rests with the United States.”