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A Collection of Stories on the History and Achievements of Stanislaus County



Sol P. Elias

Modesto, Cal.









pg. 94




Modesto District



Several events occurred in 1901 in rapid succession that informed the public that the collapse, and that the legal obstacles to the success of the Modesto District were at an end.


The first was the judgment in Herring vs. the Modesto District in which Judge W. W. Morrow decreed that the bonds of the district were valid. The second was the writ of mandate issued by Judge Lorigan commanding the directors to call the irrigation election. The third was the almost unanimous election of a strong irrigation board of directors. The fourth was the mandate issued on the Herring judgment directing the board of directors of the district to levy an assessment to pay this judgment. The fifth was the favorable composition with the district's bondholders. Following these momentous episodes, all opposition to the district faded away into the mists of the past. The Modesto District then began its steady march forward to the destiny visioned by the irrigation pioneers.


After Judge Lorigan rendered his decree, the directors moved forthwith to issue the call for the election. John Adams voted against the resolution providing that the board proceed to call the election though he subsequently voted for the resolution arranging for the election. The election was held on February 6, 1901. In division one, T. K. Beard defeated A. F. Underwood, anti-irrigationists, by a vote of 24 to 11. In division two, W. R. High defeated John Adams by a vote of 271 to 32. In division three, Frank C. Davis, unopposed, received 186 votes. In division four, C. C. Baker was re-elected by a vote of 25 to 23, defeating that stalwart pro-irrigationist, Sam Gates, by a majority of only two votes. L. A. Finney remained on the board as the only hold-over. A. F. Underwood, the


pg. 95


anti-irrigationist, defeated by T. K. Beard, became so incensed at this defeat and the trend of events that he sold his landed holdings at $20 per acre and removed to Santa Cruz. The other anti-irrigationists remained in the district, became passive spectators of the development that followed the settlement of the prolonged controversy and waxed affluent through enhanced land values.


The noticeable features of this election were the small total vote cast for the anti-irrigationists, the return of T. K. Beard to the directorate and the election of W. R. (Russ) High as a director. Mr. Beard had previously resigned because it was discovered that he was ineligible to hold the office owing to his non-residence in the division that had elected him. In the later months of this year, Mr. Beard's indomitable optimism and faith in the ability of the district to comply with the terms of the settlement offered by the bond holders conquered the feeling of his conferees that these provisions could not be met and in the final analysis accomplished the result that brought prosperity and progress to the Modesto Irrigation District. During this period in which the negotiations with the bond holders were pending, Mr. Beard proved himself a most valuable and indefatigable member of the board. Russ High became a tower of strength to the district because of his persistent effort to effect the proposed agreement.


On March 5, 1901, this board initiated the movement to effectuate the compromise with the bond holders. On this date they issued an invitation to the bondholders and their representatives through Warren Gregory, to meet with them to consult on the best means of arriving at an understanding in all matters which involved the district and its creditors. On March 15th, Mr. Gregory replied that he and the bond holders were ready to meet the board but suggested that the proper time had not yet arrived for such a meeting. In April the entire board was constituted a committee to confer with the directors of the Modesto and the Turlock Defense Association on the subject of the proposed adjustment with the bondholders. It was agreed with the representatives of this association to appoint committees to visit San Francisco for a conference with attorneys of the bondholders with a view to a harmony of action concerning existing differences.


pg. 96


The first intimation that the bondholders were in a receptive mood and favorably inclined toward the granting of relief to the land owners of the Modesto District was contained in a letter received by C. A. Stonesifer, Esq., from Warren Gregory, the latter being the legal representative of many of the bondholders. The letter was as follows:


“Law Offices of Chickering & Gregory,

January 30, 1901.

A. Stonesifer, Esq., - I am in receipt of yours of the 28th inst., in which you state that it is desirable for the purposes of the present election in the Modesto Irrigation District that the bondholders state their terms of compromise.

I have consulted with Mr. Albert Meyer, am authorized by him to state that, so far as the bonds which we represent are concerned, we will be willing to place the unpaid coupons in a bank, and as soon as the property holders have completed their original system, or at least done it in a substantial manner, the coupons may be destroyed and thus the interest account of the district wiped out. The interest account now accrued and unpaid amounts to $267,043.12, so that this is, as you will note, a very liberal offer on the part of the bondholders. Of course when these coupons are destroyed we shall expect that all pending suits be dismissed and an effort made on the part of the district in good faith to meet the coupons which may thereafter accrue.


I presume it is not now necessary to go further into details, but should favorable directors be elected, it seems to me that the property owners could raise the amount of money necessary to complete the works without much difficulty, and as soon as that money is in bank, you will find that some contractors would be willing to build the works for about half the amount which they would charge were they obliged to take their pay in bonds.


Very truly yours,

Warren Gregory.”


The Albert Meyer mentioned in the foregoing letter was the brother of Daniel Meyer, the San Francisco capitalist and banker who represented nearly all of the districts' bonds not held locally and some other bonds owned by Los Angeles people.


pg. 97


After the election, Mr. Stonesifer again wrote the firm of Chickering and Gregory and received the following replies:


“Law Offices of Chickering & Gregory,


San Francisco, Feb. 8, 1901.


C. A. Stonesifer, Esq., Modesto, Cal.; - I am in receipt of yours of the 7th instant and am very much pleased to note the result of the election, which was already stated in “The Chronicle.” You may rely upon it that the parties whom we represent will stand by the offer contained in my letter, and the sooner we can get to work at some substantial and definite basis, the better.

I have had much difficulty in securing the writ of mandate on account of the fact that Judge Morrow only holds court semi-occasionally and has put his law and motion calendar over until March. I went down the other day and had it set for Monday morning, more for the purpose of getting the writ than for the purpose of having it served. Noting your request, however, I shall state publicly in the court room that I am informed that there will be efforts made to adjust all these matters and that therefore the matter may be continued.


It seems to me that the first thing the new Board of Directors should do is to make substitution of attorneys, because it is quite useless to attempt to do anything as long as Mr. Eastin is their advisor. A committee should then be formed who will come down here to interview Mr. Meyer and myself and have a general talk over the situation. Then we shall be pleased to come to Modesto and meet the Board in open session and execute whatever formal documents may be necessary.


I shall immediately proceed to get definite powers of attorney from all bondholders I can hear of, and if there is any legislation which seems to you necessary in order to effect a compromise of the whole thing, I hope you will suggest it at once because the legislature will soon adjourn.


Very truly yours,


Warren Gregory.”


pg. 98


The second letter relating to proposed legislation was then received and is as follows:


“Law Offices of Chickering & Gregory,


San Francisco, February 11, 1901.


C. Stonesifer, Esq., Modesto, Cal: - The application for mandate came up this morning in Judge Morrow's court, and both Judge Paterson and C. W. Eastin were there. They requested further time on the ground that Judge Paterson had been away from the city for some time past.


I stated in open court that I was informed a change would take place in the Board of Directors of the district, and an effort be made to compromise the entire matter and did not oppose a continuance for two weeks.


I have no doubt that in all the plans which may be proposed to settle matters between the district and the bondholders there will be involved the proposition of refunding the present debt, under the provisions of the Act of April 1, 1897, Stats., P. 394. It is therefore necessary for all parties interested to examine this act narrowly and determine what, if any, amendment should be passed by the present Legislature. In my opinion it contains some very dangerous features which will completely negative any action which might be attempted toward refunding the bonds. The danger lies in the fact that the act requires a judgment on the refunding bonds to have been brought to a finality before any bonds may be changed. (See Sec. 16) That is, not only must the district authorize refunding the bonds, but there must be brought an action in the Superior Court by the Board of Directors, to determine their validity. In this action any taxpayer may appear and contest the validity of the bonds sought to be refunded. The result of this would be, that if we now propose to refund all the present indebtedness of the district, Mr. Eastin could induce some taxpayer to file an answer going over the same ground that he has heretofore gone in all the cases, as to the validity of the present outstanding bonds. There would possibly be no objection to this if the matter could be speedily heard, but the law's delays would undoubtedly enable him to hold this matter over for two or three years before a final judgment could be rendered, and he could inject into the record a federal question which might allow him to get out a writ of error to the Supreme Court of the United States


pg. 99


which would still further delay matters, although I have not much fear of this latter, because the Supreme Court of the State would probably not allow the writ of error.


It is my advice that this act be so amended as to strike out section 6 completely, and amend the remainder of the act in such way as to allow a suit to be brought by the district to determine the validity of the bonds, but not to make that obligatory.


The action to try the validity of the outstanding bonds is purely for the benefit of the bondholders. If they are willing to take the chances, the district ought to be. But as the law now stands the district has no power to issue the refunding bonds until this suit had been finally determined. This is nonsensical legislation and quite destroys the force of the present act.


I suggest that you talk this over with the friends of irrigation at Modesto and give it your immediate attention, because if anything is to be done, it will be necessary to put a bill in the hands of your representative from Stanislaus county at once.


Very truly yours,


Warren Gregory.”


From this correspondence it was apparent that the bondholders were chary of entering into conference with the directors until they were assured that C. W. Eastin, the counsellor (sic) for the Defense Association, was placed in a position in which he could not resort to the usual tactics of delay. This was subsequently accomplished by the election of W. H. Hatton and L. L. Dennett as the attorneys for the district.


Accordingly the first meeting of the various committees with the representatives of the bondholders occurred in the offices of Chickering and Gregory on February 15th, 1901. The bondholders were represented by Warren Gregory, of the firm of Chickering & Gregory, Judge Rosenbaum, of the firm of Rosenbaum & Scheeline, and Albert Meyer, of the banking house of Daniel Meyer & Co. The Board of Trade was represented by Frank A. Cressey, V. E. Bangs, C. R. Tillson, J. W. Davison, Garrison Turner, W. H. Hatton and L. L. Dennett, and the directors by W. R. High and T. K. Beard, two of the newly elected Irrigation Directors.


pg. 100


Frank A. Cressey was chairman of the committee and acted as its spokesman. C. A. Stonesifer, L. W. Fulkerth and S. P. Elias were also present.


Mr. Cressey, as chairman of the local committee, defined the position of the district, that a pro-irrigation Board of Directors had been elected and that the people were practically a unit for the early completion of the works of the district. A general discussion then ensued, participated in by all. The best of feeling prevailed and there was shown a disposition by the bondholders to meet the people of the district half way. Mr. Gregory stated that the bondholders were willing to deposit the $267,000 interest coupons in the Modesto Bank and to have them destroyed upon the completion of the irrigation works. Many propositions were discussed, all looking to the provision of means for the purpose of completing the system of irrigation works as speedily as possible, but no definite plan was evolved.


During the succeeding months T. K. Beard, W. R. High, Frank A. Cressey and the other members of the various committees were in constant conference with the representatives of the bondholders evolving the plan that subsequently was adopted. These men were indefatigable workers on all elements of the agreement, High and Beard representing the district and Frank A. Cressey the local bondholders. On several occasions it appeared that the compromise would fail because of the lack of faith of the members of the committee in their ability to meet the requirements prescribed by the bondholders. Mr. Beard's optimism and faith and energy – the keynotes of the final success – buoyed the others up to the continuing point and finally the settlement was effected to the satisfaction of all..






Transcribed by: Jeanne Sturgis Taylor.

Source: Elias, Sol P., Stories of Stanislaus – A Collection of Stories on the History & Achievements of Stanislaus County.  Modesto, CA. 1924.

© 2012 Jeanne Sturgis Taylor.



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