Although the new company furnished the city with an adequate supply of water, it soon embroiled itself in controversy. Most of its disputes, often in the courts and always in the San Francisco newspapers, centered on public ownership and water rates. Hardly had the company formed when city supervisors appointed a special committee to eliminate it. The committee of General B. S. Alexander of the Army Corps of Engineers and Professor George Davidson of the U.S. Coastal Survey were to evaluate the water sup ply needs of the city with an eye toward municipal ownership. In 1871 they recommended that the city ought to have "absolute control" of its water supply. The committee noted that in other cities such as Newyork, Boston, Philadelphia, Chicago, and Washington (and soon Los Angeles), the water system was under municipal ownership. San Francisco should do no less. In 1877 the supervisors took action, offering to purchase Spring Valley for $ii million. The company demanded $16 million, and the gap could not be bridged. Had the two sides arbitrated the difference, many years of controversy and charges of cunning and corruption could have been avoided. Furthermore, the fate of Hetch Hetchy Valley might have been very different. More than 50 years ensued before the city of San Francisco finally passed the bonds to buy out the Spring Valley Water Company.
Part of the difficulty in purchasing the company involved the ownership. From the beginning the stockholders were men of wealth, part of the "dynastic elites." San Francisco financiers such as Charles Crocker, Leland Stanford, Mark Hopkins, Collis Huntington, Darius Ogden Mills, William Ralston, James Ben Ali Haggin, and Lloyd Tevis all held interests in the Spring Valley Water Works.21 Even the famed landscape architect Frederick Law Olmsted recognized this valuable stock, although he had nothing but contempt for most of the owners. When he arrived for his two-year stay in California (1863-1865), he soon purchased Spring Valley stock.22 Why not? The utility company kept acquiring both land and water rights, and increased its return on investment. In 1870 the company grossed $817,000 from its customers, returning $480,000 in dividends, a 59 percent return. Certainly a smile must have crossed the Spring Valley nabobs' faces when, in 1875, the company returned a 61 percent yield.23 Wealth begets wealth, and though mining fortunes would shrink later in the century, unregulated private utilities offered lucrative opportunities.
Alongside utilities, the main opportunity for the wealthy shifted from the roller-coaster world of mining stock to more conservative real estate investments. By 1885 William Randolph Hearst recommended to his father, George, who had amassed his fortune through mining ventures, that he direct his investments to land. With second-generation wisdom, William declared that "the landlords are always a wealthy class." Each child born created another hungry mouth to feed and "every atom of humanity added to the struggling mass means another figure to his [the landlord's] bank account."24 His jaundiced analysis of society aside, the owner of the San Francisco Examiner realized that population growth demands space and that land would ultimately appreciate.
This fact was not lost on the stockholders of Spring Valley either. Cer tainly water could yield amazing profits, but land could yield even more if the owner could ensure water. It was, and is, the marriage of land and water that gives land its value, particularly in the American West. No one knew this better than Harry Chandler, James Otis, Fred Eaton, and William Mulholland, the men who worked and schemed to bring Owens River water by aqueduct to the parched land of the San Gabriel Valley, thus laying the foundation for the growth of Los Angeles, and also lining their pockets. Of course the San Francisco Peninsula was better watered than the San Gabriel Valley; yet 20 inches of rain, when it all came in a winter deluge, was not sufficient. Coastal fog slipping over the hills could not relieve the dry summer months as the creeks vanished and grasses turned brown, or as California boosters preferred, "golden."
A dependable, regulated water supply for not only San Francisco but the southern lands as well could be profitable in the long run. This reality was evident to Spring Valley's talented Swiss engineer, Hermann Schussler. Under his leadership in the 186os, the company aggressively expanded into the watersheds of San Mateo County. First came the purchase of the Pilarcitos Creek watershed, diverting the creek's flow from the Pacific Ocean to a redwood flume aimed at San Francisco. More purchases followed, particularly through the heart of the scenic San Andreas Valley, which stretched north to south for some 25 miles. Once the company agents secured the land, Schussler laid out the reservoirs of San Andreas and Crystal Springs. By purchase or eminent domain, the company increased its holdings to more than ioo,ooo acres, building a water empire as it excavated earth, siphoned water, and laid pipe.
Schussler possessed exceptional engineering ability. In 1873 he supervised the laying of an aqueduct that stretched from Lake Tahoe across the level lands of the Washoe Basin and then rose to Nevada's Virginia City. Many thought this gravity system would be a disaster, but it worked. Schussler was one of those hydraulic engineers quite determined to "reconfigure the planet's plumbing."25 He enjoyed the challenge of moving water to where it was wanted and relished shaping his environment to meet his engineering objectives. No job seemed impossible for his hydraulic engineering skills. His capstone was the construction of the Crystal Springs Dam, completed in 189o and reported to be the world's largest concrete darn at the time.26 The structure captured the waters of San Mateo Creek, creating Crystal Springs Reservoir. Ironically, Schussler did not know that directly beneath his reservoir the Continental and Pacific Rim tectonic plates ground against each other, creating a frightening tension and energy that would be unleashed on the city of San Francisco in April of 19o6. However, perhaps as a tribute to his engineering skills, the great earthquake did no structural damage to his 15o-foot-high dam of interlocking concrete blocks. A century later it remains solidly in place.
Building the Schussler system for Spring Valley was not without controversy. Company agents purchased land secretly and often under false pretenses. Reluctant landowners found themselves in court, facing company attorneys who claimed the right of eminent domain. The owners might also have to defend themselves against the San Mateo County supervisors, who were often beholden to Spring Valley. In the southern part of the county angry landowners often received only a fraction of their property's worth. The company became a bully but justified its aggressive style by citing San Francisco's insatiable water demands. But that was not always the case. When the residents of the tiny town of Searsville, to the west of Palo Alto, lost their court case in 1879, they saw their homes inundated by fathoms of water. Ironically, the California State Railroad Commission determined in x892 that Spring Valley could do without the Searsville reservoir water. Stanford University ultimately acquired the 105-acre lake for irrigation, recreation, and research purposes.27
San Francisco watched the expansion of the Spring Valley system with ambivalence. On one hand, the city needed more and more water, and thus growth drove expansion. On the other, city officials dreaded the company's political power, particularly in setting rates. The city seemed to be held hostage by Spring Valley. This was particularly true in the 187os when the company accrued excessive profits through its monopoly and its exploitation of a laissez-faire system. However, that situation changed when the California constitution of 1879 empowered the San Francisco Board of Supervisors with the responsibility of annually setting water rates.28
Certainly the supervisors curtailed Spring Valley's exorbitant profits, but the new constitution could do nothing to curb city corruption. San Francisco had been no stranger to urban graft, but it seemed to become institutionalized by the i88os.As in NewYork and a number of other cities during the gilded age, city government fell into the hands of political bosses who wielded great power without the moral or ethical leadership one might hope for in a democratic system. San Francisco had its own handful of bosses to rival the notorious Boss Tweed of NewYork's Tammany Hall. In the 188 os "blind boss" Chris Buckley held sway over both the Democratic Party and City Hall. Republican Martin Kelly replaced him. Mayor J
ames Phelan gave the city a splash of honest government, but by 1902 Abe Ruef, a refined former valedictorian of the University of California who evidently had taken no courses in ethics, headed the world of rake-offs at City Hall. Only after a judge sentenced Ruef to 14 years in San Quentin prison, in a political shake-up almost as violent as the 19o6 earthquake, did some semblance of honesty return.29
The modus operandi of the bosses was to receive "retainers" from Spring Valley as well as other municipal monopolies, and then to distribute bribes to supervisors for necessary votes. The pattern began immediately after the supervisors were entrusted with setting water rates. In 1883 the San Francisco electorate voted in Washington Bartlett as mayor on a platform committed to lowering Spring Valley rates. Supervisor J. J. Reichenback supported him, declaring that "justice demands this." However, Mayor Bartlett did not take into account "blind boss" Buckley's annual Spring Valley "retainer" Of $5,000 to $1o,ooo. When the supervisors passed the 1883 water ordinance with no reduction in rates, Bartlett discovered how powerless he was. One week later the supervisors passed the ordinance over the mayor's veto, in a vote of nine to two. Among the majority was Supervisor Reichenback.30
By the mid-189os the city of San Francisco cleaned house with the election of Mayor Phelan. Also, Spring Valley reversed its corrupt practices under the direction ofWilliam Bourn. Both men were of high principles, and each led his organization in more respectable directions.Yet there was little Bourn could do to stem the tide of Spring Valley's bad publicity, which seemed to continue unabated from 188o until its sale to the city in 1928. It was a private monopoly at a time when almost all American cities' water supplies were municipally controlled. In fact Spring Valley was the largest investor-owned water utility in the nation.With its large landholdings in five counties, representing an area three times the size of San Francisco, Spring Valley seemed an "octopus" only exceeded in its reach by the equally despised Southern Pacific Railroad. The company seemingly proved the axiom that you cannot outlive your past. When the San Francisco earthquake turned into a fire that devastated four square miles of downtown, it was Spring Valley that absorbed much of the blame. One San Francisco magazine, The Grizzly Bear, labeled Spring Valley an "arrogant and consciousless monopoly" that had cost the city $Soo million.31
The Grizzly Bear, as the magazine's title suggested, grew out of San Francisco's scrappy, devil-may-care journalistic tradition. Newspapers, which emerged and disappeared with frightening speed, seemed to thrive on character distortion and rumor. Spring Valley always seemed to offer fodder for such papers as the San Francisco Chronicle, which took pride in its reputation as a courageous, vindictive, spunky, master-of-insult daily. The Chronicle in many ways assumed the character of its owners, Charles and Michael de Young. For an idea of how inflammatory the paper could be, one must re treat to 1879, when Baptist minister Izaac Kalloch ran for mayor under the banner of the Workingmen's Party. The de Young brothers attacked his candidacy in the pages of the Chronicle. No shrinking violet himself, Kalloch, in a public address, called the de Young boys "the bastard progeny of a whore born in the slums and nursed in the lap of prostitution." This description did not sit well with Charles, who took to the streets and from a horse-drawn cab fired his pistol at close range on Kalloch. Injured, the minister survived to fight on and become mayor. Charles did not fare so well. Kalloch's enraged son sought him out and killed him with a well-placed bullet to the throat. Perhaps indicating the city's mood toward Charles de Young, a jury hastily acquitted young Kalloch on the "ground of reasonable cause."32 Thirty-year-old Michael took over from his deceased brother, running the Chronicle for the next 45 years.
In the years to follow, the Spring Valley Water Company was often the target of Michael deYoung's bombastic journalism. He seemed to have learned little from his brother's violent death. Conflict between deYoung and Spring Valley came to a head in i9o9. That year deYoung decided he could control the water company through defiance. To test his assumption, he refused to pay the water bill for his Chronicle building. Spring Valley president William Bourn, a man who detested what he considered vile behavior, sent his representative A. S. Crawford-who had actually worked for the newspaper for 17 years-to reason with deYoung. The discussion got nowhere, the fiery publisher declaring that the water rates were "nothing short of robbery" On October 8, i9o9, Bourn dispatched Crawford for the last time with instructions that deYoung be informed that if he did not pay his water bill, Spring Valley would be forced to cut his building off. Michael deYoung vowed that if that happened, he would assign a reporter to do nothing but dig up dirt on the water works and "rip your company up the back and wide open." When the time for payment came and went, Bourn ordered the water main to the Chronicle building closed. It took only a few hours for de Young to reconsider and pay his bill, but true to his word, the publisher continued his attack against Spring Valley and William Bourn.33 Time and again the media attacked the company, and of course the Chronicle became an ardent supporter of the city's plans for the Hetch HetchyValley.
From the tortured relationship between the Spring Valley Water Company and the city of San Francisco, it becomes apparent why the far-off valley called Hetch Hetchy became an attraction, indeed almost an obsession, for city leaders. Over the years the company had committed the sin of gouging and feeding from the public trough whenever possible. Between 186o and 188o Spring Valley took every advantage allowed by unregulated capitalism. The San Francisco Peninsula owners, of which there were many, not only garnered remarkable dividends on their stock but enhanced the value of their landholdings by the availability of water. Soon some would be carving sections of land from their manorial estates to create well-watered and profitable subdivisions. Perhaps representative was Francis Newlands, son-inlaw of California senator William Sharon, who developed peninsula land with the Burlingame Country Club as the centerpiece. The parcel was first purchased by William Ralston, then became part of Sharon's holdings. But it was Newlands who would successfully develop expensive, well-watered lots that would split off as Hillsborough, still the residential retreat of the rich. Mining money begat real estate wealth, and certainly Francis Newlands, the future Nevada senator and sponsor of the Reclamation Act of 1902, knew a thing or two about the profitable manipulation of water.34
As SAN FRANCISCO'S wooing of a water source continued, the Sierra Nevada looked more and more inviting. In truth, long before Mayor Phelan took office, San Francisco leadership had toyed with the idea of a municipal water supply from the distant mountains. However, the mayors and supervisors seemed bent on entertaining proposals rather than initiating them. Perhaps the first and the most outlandish proposal came from Colonel Alexis von Schmidt, a German military man who had participated in the gold rush and then proclaimed himself an engineer. He had confidence and a disposition that bordered on arrogance, and in some ways his ethics paralleled those of boss Abe Ruef. After one hydraulic failure to transport water to Virginia City, he found sporadic employment with the early Spring Valley Water Works. In 1865 he found reason to abandon his employer to promote a company whose name described its purpose: "Lake Tahoe and San Francisco Water Works Company."35 His intent, of course, was to drain that jewel lake of the Sierra Nevada to provide water for the needs of the growing city. Never mind that to do so would necessitate a water basin transfer and a lengthy tunnel, as well as despoiling a much admired lake.Von Schmidt was not a great engineer, but his professional skills outweighed his political acumen. His scheme would have reduced the Truckee River to a trickle-a stream as central to Nevada as the Sacramento River was to California. The Virginia City Territorial Enterprise suggested that if von Schmidt dared to take Lake Tahoe water, he should bring an "escort of twenty regiments of militia." The newspaper conceded that San Francisco mining moguls "may take the gold and silver from our hill and bind us in vassalage to the caprices of their stock boards" but the waters of Lake Tahoe would not flow west.36 Von Schmidt assured the Nevadans that they were being unreasonable; there w
as plenty of water for everyone. However, the vision of a dried-up Truckee River and a bathtub-ringed Lake Tahoe reservoir worked against him. Still, von Schmidt did not accept defeat. In 1871 he convinced the San Francisco supervisors to approve his proposal, but the mayor vetoed it, fearing legal challenges. For the moment, the Lake Tahoe proposal was dead.
In the 1870s San Francisco supervisors continued their attempt to bridge the $S million gap with Spring Valley. But with negotiations at a standstill, the supervisors, as well as the newspapers, were full of ideas for a city-owned water system. Where to find the water? Most every politician, engineer, and journalist looked to the Sierra Nevada. The San Francisco Examiner suggested that with an expenditure of $io million, the city could construct "a line of pipe of one hundred and fifty miles in length" bringing "the purest water known." Just which source should provide the water was unclear. The South Fork of the American River, Clear Lake (north of the city), the Tuolumne River, the King's River, the Rubicon River (a branch of the American), and Blue Lakes (in the Sierra Nevada mountains) were all candidates. The Spring Valley water system seemed to draw less attention, for San Francisco had set its sights on the distant Sierra Nevada rivers. In fact the Examiner declared that "the water of the mountains is to that of the Spring Valley Company as is a ripe, sound peach to a rotten one."37 The Examiner advised that the city disregard the cost. London failed to go to its hills and "prefers to pump what it needs from the filthy Thames." San Francisco "can do better.."35
The Battle over Hetch Hetchy: America's Most Controversial Dam and the Birth of Modern Environmentalism Page 6