Cadillac Desert_ The American West and Its Disappearing Water - Marc Reisner [49]
Mulholland had an even more important reason for wanting to include the San Fernando Valley in his scheme. Under the city charter, Los Angeles was prohibited from incurring a debt greater than 15 percent of its assessed valuation. In 1905, that put its debt limit at exactly $23 million, which was what he expected the aqueduct to cost. But the city already had $7 million in outstanding debt, which left him with a debt ceiling too low to complete the project. After coming this far—securing the water rights, organizing civic support—he wouldn’t have the money to build it!
Mulholland, however, was clever enough to have thought of a way out of this dilemma. If the assessed valuation of Los Angeles could be rapidly increased, its debt ceiling would be that much higher. And what better way was there to accomplish this than to add to the city? Instead of bringing more people to Los Angeles—which was happening anyway—the city would go to them. It would just loosen its borders as Mulholland loosened his silk cravat and wrap itself around the San Fernando Valley. Then it would have a new tax base, a natural underground storage reservoir, and a legitimate use of its surplus water in one fell swoop.
Anyone who knew this, and bought land in the San Fernando Valley while it was still dirt-cheap, stood to become very, very rich.
The person who finally began to figure it all out was Henry Loewenthal, the editor of Otis’s despised rival newspaper, William Randolph Hearst’s Examiner. The Examiner had been skeptical of the aqueduct plan from the beginning, though it did not oppose it outright; Loewenthal’s editorials merely made a point of questioning Mulholland’s sense of urgency and, on occasion, his figures. But even such mild skepticism was more than enough to enrage Otis, who attributed Loewenthal’s doubts to the fact that the Times had scooped the Examiner about the aqueduct story. “Anyone but a simpleton or a poor old has-been in his dotage would sing very low over a failure like that,” snarled Otis in an editorial, “but the impossible Loewenthal insists on emphasizing his own incompetency.”
Such invective simply instilled in Loewenthal a passionate urge to outscoop Otis, and, in the process, catch him with his hand in the till. There must be some hanky-panky, Loewenthal surmised. Otherwise why Otis’s sudden interest in a desolate valley? And why did Otis’s number-one enemy, E. T. Earl, rival publisher of the Express, seem as enthusiastic as Otis? In the past, Earl had opposed nearly anything Otis endorsed, and vice versa, as a simple matter of dignity. But now Otis, Earl, and virtually all the rival newspapers, except his own, were united on perhaps the most controversial issue Los Angeles had ever faced. Why? Loewenthal decided to send a couple of his top reporters to the courthouse in San Fernando to find out.
The co-conspirators hadn’t even bothered to cover their tracks. They could have invented blind trusts, paper corporations, or some other ruse to conceal their identity; but there they were, caught in the open on an exposed plain.
On November 28, 1904—just six days after Joseph Lippincott was paid $2,500 to help steer his loyalties in the direction of Los Angeles—a syndicate of private investors had purchased a $50,000 option on the Porter Land and Water Company, which owned the greater part of the San Fernando Valley—sixteen thousand acres all told. Innocent enough. But the investors had then waited to consummate their $500,000 purchase until March 23, 1905—the same day that Fred Eaton had telegraphed the water commission that the option on the Rickey ranch in Long Valley was secured. On that day, as anyone who had access to Mulholland’s thinking knew, Los Angeles was all but guaranteed 250,000 acre-feet of new water—an amount that would leave the city with a water surplus for at least another twenty years. And the only sensible place to use the surplus water was in the San Fernando Valley.
Was the timing mere coincidence? The names of the investors who made up the secret land syndicate strongly