Mulholland was not the only person to realize that some sort of impasse was imminent. As the days began to count down to the expiration of the water company’s lease in 1898, some civic leaders began to campaign for the city’s reappropriation of its most valuable resource. As early as the end of 1891, papers carried news that the city had approached William Perry to ask at what price he might be willing to sell. Perry’s quick tally of assets resulted in an estimate of $2.5 million, though he cautioned that he was not making any offer. Such a matter would have to be taken up by his board in consultation with their stockholders. Nonetheless, his figures were dismaying to politicians who could only imagine the level of resistance they would encounter among taxpayers who would have to foot such an astronomical bill.
Some critics countered that the city should simply build its own waterworks and bypass the company altogether, but the courts advised that under the terms of the lease, only the Los Angeles City Water Company was authorized to sell the river’s water to the citizenry. Furthermore, the founders of the company had anticipated that the question of ancient pueblo rights to the water would likely someday come under challenge. In the British legal system, which guides the principal practice of law in the United States, the concept of riparian rights prevails—basically, whoever owns the land through which a river flows owns the water flowing therein. Under that concept, the city was entitled only to the water from the part of the river that flowed within the city limits.
With this in mind, the Los Angeles City Water Company, shortly after signing the original lease with the city, had created a separate corporate entity that they called the Crystal Springs Land and Water Company. The chief asset of this subsidiary consisted of a sizable tract of marshland adjacent to the Los Angeles River just above the Glendale Narrows from which a groundwater supply would be extracted, water that ostensibly was not part of the Los Angeles River. As a further attempt to distance its operations from city influence, the water company then transferred its own interest in the city’s river water to its own subsidiary for the standard $1 and other considerations. Eventually, the Crystal Springs Land and Water Company would contend that, as a separate corporate entity, it was not bound by the terms of the original lease; but, given that the two concerns shared a common board of directors and set of officers, this argument did not prevail.
Still, if the city wished to purchase the Los Angeles Water Company, they would have to purchase the holdings of Crystal Springs as well, and by 1893 the price had risen to $3.3 million. The city had meanwhile commissioned its own estimate of the value of the water company holdings, which was dutifully reported in the newspapers. According to City Engineer Henry Dockweiler, the appropriate sum was just shy of $1.5 million. At that point, the matter became moot when the company responded that Dockweiler’s figures did not take into account the value of the water sources the company had developed at Crystal Springs and that, furthermore, the company was not for sale at any price.
Mulholland, as superintendent of operations for the company, was not involved in questions of corporate policy. His job was to keep the pipes flowing as best he could, a position that suited him perfectly, for he was a doer and not a paper-pusher, his attitude toward such detail best summed up by the observation, “If you leave a letter in the basket long enough, it will take care of itself.”
Yet he was increasingly viewed as the face of the Los Angeles City Water Company and late in 1892 had been called upon to testify on behalf of the city and the company in what would turn out to be a significant court case, Vernon Irrigation v. the City of Los Angeles, involving the city’s rights to river water. In that case, a pair of developers argued that they were entitled to withdraw a certain portion of water from the Los Angeles River to benefit their new development just south of the city’s center. The judge in the case eventually rejected the plantiffs’ claims, affirming that the city owned the water in the river and though it was entitled to sell any excess water to any parties it wished, it could not be compelled to do so.
That might have ended the case, but the plaintiffs appealed to the California Supreme Court, which ruled in 1895, affirming the original decision in the main. However, the Supreme Court took exception to the notion that the city was free to sell any excess water for the purpose of irrigating land outside the municipal boundaries. At the time, no one gave much thought to this ruling, for the city was quickly approaching the point where the notion of “excess water” was a fantasy. As history demonstrates, however, such afterthoughts have a way of reinserting themselves into the greater scheme of things.
In some ways, Mulholland’s insistence that there was “little to report” regarding his first decade as superintendent of the water company was truthful. Though he would have had his own opinions about the men for whom he worked, he was above all a loyal man. He had his share of confrontations with Perry and the board of directors, but they were primarily concerned with practical issues of maintenance of the waterworks that often conflicted with Perry’s desire to increase profits: the costs involved with improvement of mains, expansion of storage reservoirs, and maintenance of fire hydrants and street-sprinkling valves.
If there was one bedrock conviction that Mulholland held and that conflicted with those of his superiors, it was that their customers were owed what they were paying for. Nor was he trying to squeeze blood from a rock; the company’s revenues had grown from $20,000 in its first year to $425,000 in 1896. On the other hand, he viewed the notion that the city could duplicate what had become a vast and basically sound water-delivery system with a parallel system of its own as lunatic at best and political grandstanding at worst. From a system that began with 3 miles of wooden pipe and 1 mile composed of iron, by 1896 there were 325 miles of water pipeline laid within the city. To Mulholland, what would happen in 1898 remained to be seen. Until then, a deal was a deal.
Meanwhile, pressure from the city on Perry and the company’s board increased. In 1897 Mayor Meredith Snyder addressed the City Council, lamenting that there had been much talk but little action in moving matters forward toward some resolution with the water company. “Each citizen demands that something be done that he be protected from further suffering caused by a corporation whose greed is great and relentless,” Snyder said. The company was holding out for $3 million, and the city’s offer was firm at $1.3 million.
Finally, in July 1898 a board of arbitration was appointed, composed of one representative chosen by the city, a second put forward by the water company, and a third elected by the other two. The city also appointed a board of engineers deemed better suited to supporting their valuation of the company’s holdings to the arbiters. As J. B. Lippincott, a member of the city’s engineering board recalls, they of course called in Mulholland, as chief engineer and plant manager, for questioning.
Mulholland was his typical no-nonsense self when he took his seat before the board. What exactly was it that they wanted to know? he asked, in a tone that suggested he could be somewhere getting real work done.
The board needed a complete list, engineer James Schuyler replied. “The length of pipe, its size, character, and age. We also want to know the number of gate valves and all about them, as well as the number and position of fire hydrants and all other structures connected with the water system.”
Schuyler and the others presumed that their request would precipitate a delay of indeterminate length while the superintendent busied his staff with the collection of the necessary documents, essentially stalling the entire process. Still, they were determined to have a firm basis upon which to press their case with the arbiters.
Thus Mulholland’s answer was something of a stunner. “Get a map,” Mulholland told the board, “and I’ll show you.”
The board had a drafting table cleared and a sizable plat of the city spread out. Mulholland then proceeded to sketch out from memory a diagram of every pipe on every city street, along with notations of size, type, and age, as well as a description of connective fitti
ngs, the location of gate valves, and fire hydrants. The board sat in amazement as Mulholland worked, but still, Schuyler pointed out at the end of the process, “memory” did not seem an adequate basis upon which to proceed in such a matter.
Mulholland stared back. What then, would the board have him do? After a conference, the board reached a consensus. If Mulholland was not opposed, they wished to dig up a few places along the lines that he had sketched out on the map, just to check.
Mulholland did not mind, he assured the board with a wave. Where exactly would they like to dig?
If Schuyler was smiling smugly as he made notations on the map, the record does not reflect it. In the end, the board placed red circles on 200 locations scattered about Mulholland’s map. One could assume that Mulholland would be affronted or at least exasperated by such a request, but as Lippincott recalls, the superintendent actually seemed cheerful as he left the meeting.
Two hundred excavations were subsequently made, Lippincott reports, and at each the findings bore out Mulholland’s notations to the letter. It is a story often repeated, but one that reflected typical Mulholland practice, says Lippincott, to allow interrogators and opponents to exhaust themselves while he placidly endured, waiting for the right moment for one solid counterpunch. Nor was his unwillingness to suffer fools limited only to his adversaries. During the protracted arbitration proceedings that followed, Mulholland sat at his employer’s table while a water company attorney badgered a city witness unmercifully.
Finally, the attorney, losing steam but still determined to discredit the witness, turned to Mulholland for help. “What else shall I ask him?” the attorney asked quietly.
Mulholland leaned close. “Ask where he got that red necktie he is wearing,” the superintendent whispered.
The attorney glanced hurriedly at the witness, then back at Mulholland, who was now sitting sphinxlike. Quickly the attorney rose and asked the judge for a recess, which was granted.
“What about that necktie?” the puzzled attorney asked Mulholland when they were alone.
The water superintendent shrugged. The attorney had already asked everything else in the world. It was the only question he could think of.
A CIVIL SERVANT BORN
DESPITE THE FACT THAT THE COMPANY’S LEASE EXPIRED on July 21, 1898, it would take nearly four years for negotiations between the Los Angeles City Water Company and the city to play out. In the meantime, the city’s population more than doubled between 1890 and 1900, to 102,479, and Fred Eaton, former superintendent of the water company and Mulholland’s boss, had been elected the city’s mayor as a business-friendly candidate dedicated to the development of Los Angeles. Eaton was no foe of private enterprise, to be sure, but, as the descendant of a land-owning family and well versed in the importance of water to survival in the West, he knew that the city could not be held hostage to private interests when it came to water. From the time of his election in 1898, he devoted a large part of his efforts to securing the takeover of the water company—some in his family say that it was the only reason he ran for office.
Despite Mulholland’s meticulous inventory of the company’s holdings, and over the protests of the company’s representative to the arbitration panel, the city determined the value of the waterworks as slightly more than $1 million. The company countered that the works were worth $2 million and that their holdings at Crystal Springs were worth another $1 million. The impasse began to crumble in 1899, when the California Supreme Court ruled in a separate suit (City of Los Angeles v. Pomeroy) that the underground waters of the Los Angeles River running above the Glendale Narrows were indeed part of the city’s property and that developers had no right to siphon off those waters in any fashion.
Following the court’s decision, Fred Eaton called for a special election to approve $2 million for the acquisition of the water company’s holdings and improvements to the system. The bond issue passed overwhelmingly, but the company in turn filed suit, arguing against the amount of the arbitration panel’s valuation of the waterworks, and as the fight continued, the impracticality of selling the bonds during pending litigation scotched the process.
Meantime, Eaton and J. B. Lippincott engaged in attempts to prove, once and for all, that any waters draining into the San Fernando Valley from its surrounding watershed, whether flowing on the surface or into underground chambers, were essentially part and parcel of the Los Angeles River. Eaton had, with the assistance of Thomas Means, a Department of Agriculture soil expert, “established the sources of the various underground feeders of the Los Angeles River,” the Los Angeles Times reported. An analysis of water samples taken far up the San Fernando Valley showed them to be identical with those taken near the Glendale Narrows. The mayor told reporters that he “therefore knows the exact source of the water supply of the city.”
Other court proceedings established that, ownership of flowing water underground aside, the “lease” that the city had signed with the water company in 1868 was still in effect and was a binding contract that obligated the city to pay the company a fair price for its holdings. To complicate the situation further, all of this wrangling was taking place against a backdrop of a drought that had persisted since 1892, leading to the company’s request that water rates be raised for the first year of the new century, and underscoring the public’s anxiety that its interests were being ignored.
Finally, in July 1901, with Eaton out of office and the flow in the Los Angeles River nearing a three-year nadir, the city made another offer to the water company: $2 million for everything, including the holdings at Crystal Springs. Banker I. W. Hellman, founder of the company that would become Wells Fargo and chief stockholder of the water company at the time, called William Mulholland to his summer home in Lake Tahoe to ask what his superintendent thought of the deal.
Mulholland would later explain that he had found the various contentions of politicians regarding the true value of the waterworks to be principally self-serving appeals to the electorate. In any such business transaction, he said, taxpayers would have to expect to pay “for at least some bone with the meat.” In a speech to the Sunset Club, he gave his opinion that the compromise was a wise one, putting an end to a situation that jeopardized the city’s progress.
It is also likely that the pragmatic Mulholland cautioned Hellman that it was possible that the company’s various court challenges and associated legal tactics would someday come to an end and that there might be a condemnation ordered that would yield the company little. Whatever he told Hellman at Lake Tahoe, the outcome is clear. On July 29, Hellman informed the city that the company would accept the $2 million offer.
An election for a new bond issue was quickly arranged, and despite some carping that the payment would result in a $1 million “steal” by the owners of the company, the matter was decided by a five-to-one margin. By the end of August 1901, it seemed certain that the city would finally have its water to itself.
Though Eastern financiers were generally optimistic about the prospects of development in Los Angeles, an economic downturn slowed the sale of the bonds, and the threat of a challenge to the election had been rumored. Still, city attorney William B. Mathews was persuasive in convincing Eastern banking interests that the issue was a gilt-edged opportunity. Though Mathews and city treasurer William Workman would have to spend most of the winter at the task, by late February the bonds were sold, the monies transferred, and the water company became officially the property of the City of Los Angeles. Workman’s return, covered by the Los Angeles Times on February 11, was marked with a parade led by a brass band, so great was the relief of city boosters. “Wherever I went the mention of California, and especially of Los Angeles, attracted attention,” Workman told reporters before giving full credit for the successful sales pitch to Mathews, without whom nothing would have happened. It was a theme that Mulholland would often repeat in the years to come. He had indeed done the work, Mulholland liked to joke, but it was Mathews “who kept me out of j
ail.”
There was no controversy concerning the proposed governance of the new agency. The City Council was in agreement that an elected board of water commissioners would oversee the system, which would operate under civil service rules. All thirty-one employees of the private company would be retained. Only one question remained: Who would lead the new city department?
It was not much of a question in reality, although there was one minor sticking point. As superintendent of the private company, William Mulholland’s annual salary had risen to $3,000. When he appeared before the City Council to discuss the new position, Mulholland explained that he would need a raise to $5,000. When some council members quibbled, Mulholland explained that as a private employee, he had been free to take on virtually any consulting job he was offered. In 1900, he said, he had made $8,000 doing such outside work. The city required that he devote all his time to the new position. In the same spirit of compromise that had dictated the purchase of the private company, the City Council agreed to Mulholland’s terms. As Mulholland later liked to joke, “When the city bought the works, they bought me along with it.” At forty-seven, the Chief became a civil servant.
In his first appearance before the temporarily appointed board of water commissioners, Mulholland stressed the need for repair and extension of a system that he said was already a decade out of date. There were two principal items on his agenda: the construction of a vast underground storage facility above the Glendale Narrows that would capture more than 6.5 million gallons of hidden water per day, and the somewhat startling intention to install meters on every customer’s line. As he told the Times on May 23, shortly after his appointment, taxpayers should not worry—his research had showed him that in communities where water meters were being used, water bills had often been cut in half.
Water to the Angels: William Mulholland, His Monumental Aqueduct, and the Rise of Los Angeles Page 6