The Origins Of LA’s Owens Valley Water Theft

There is a widely held view that Los Angeles simply went out to the Owens Valley and stole its water. In a technical sense, that isn’t quite true. Everything the city did was legal (though its chief collaborator, the U.S. Forest Service, did indeed violate the law). 

Whether one can justify what the city did, however, is another story. Los Angeles employed chicanery, subterfuge, spies, bribery, a campaign of divide-and-conquer, and a strategy of lies to get the water it needed. 

In the end, it milked the Owens valley bone-dry, impoverishing it, while the water made a number of prominent Los Angeleans very, very rich. There are those who would argue that if all of this was legal, then something is the matter with the law. 

It could never have happened, perhaps, had the ingenuous citizens of the Owens Valley paid more attention to a small news item that appeared in the Inyo Register, the valley's largest newspaper, on September 29, 1904. The item began: “Fred Eaton, ex-mayor of Los Angeles, and Fred [sic] Mulholland, who is connected with the water system of that city, arrived a few days ago and went up to the site of the proposed government dam on the [Owens] River.” The person who took them around, the story continued, was Joseph Lippincott, the regional engineer for the Reclamation Service. It wasn't so much this small piece of news that should have aroused the valley's suspicions. It was the fact that Lippincott had already taken Eaton around the valley twice before. 

The valley had no particular reason to distrust J. B. Lippincott, although a search into his background would have dredged up a revelation or two. As a young man out of engineering school, he had joined John Wesley Powell's Irrigation Survey, the first abortive attempt to launch a federal reclamation program in the West, but had lost his job soon thereafter when Congress denied Powell funding. Embittered by the experience, Lippincott migrated to Los Angeles, where, by the mid-1890s, he had built up a lucrative practice as a consulting engineer. In 1902, when the Reclamation Service was finally created, its first commissioner, Frederick Newell, immediately thought of Lippincott as the person to launch its California program. He had a good reputation, and he understood irrigation—a science few engineers were familiar with. The post, however, meant a substantial cut in salary, and Lippincott insisted on being allowed to maintain a part-time engineering practice on the side. 

Newell and his deputy, Arthur Powell Davis (who was John Wesley Powell's nephew), were a little wary; in a fast-growing region with little water, a district engineer with divided loyalties could lead the Service into a thicket of conflict-of-interest entanglements. The centerpiece of the Service's program in California was to be the Owens Valley Project, and there were already rumors that Los Angeles coveted the valley's water. One of the Service's engineers, in fact, had raised this issue with Davis. With Lippincott, a son of Los Angeles, in charge, a collision between the city and the Service over the Owens River might leave the city with the water and the Service absent its reputation. But the Service's early leadership, unlike those who succeeded them, suffered from a certain lack of imagination. “On the face of it,” Davis scoffed, “such a project is as likely as the city of Washington tapping the Ohio River.” 

The only person who seemed suspicious when Lippincott began showing Eaton and Mulholland around the Owens Valley again and again was one of his own employees, a young Berkeley-educated engineer named Jacob Clausen. His apprehensions had been aroused during Eaton's second visit, when Lippincott and Eaton had ridden up to the valley from Los Angeles by way of Tioga Pass and Clausen, at Lippincott's request, had met them at Mono Lake. On the way down the valley, Lippincott insisted that they stop at the ranch of Thomas Rickey, one of the biggest landowners in the valley. Rickey's ranch was in Long Valley, an occluded shallow gorge of the Owens River, hard up against the giant Sierra massif, which contained the reservoir site the Reclamation Service would have to acquire in order for its project to be feasible. Eaton had told Clausen that he wanted to become a cattle rancher and was interested in buying Rickey's property if he was willing to sell. As they visited the ranch, however, he seemed much more interested in water than in cattle. Clausen understood the dynamics of the Owens Valley Project—the stream-flows, the water rights, the interaction of ground and surface water—better than anyone, and Lippincott asked him to explain to Eaton how the project would work. Eaton hung on his every word, and that, Clausen was to testify later, “was exactly what Lippincott wanted.” The two Los Angeleans were good friends, and Eaton had been the first to dream of Los Angeles going to the Owens Valley for water. Was it so farfetched, Clausen would remember thinking to himself, to believe that Lippincott was out to help Los Angeles steal the valley's water? 

If Clausen 's suspicions were aroused, those of his high superiors remained utterly dormant, even though they would soon have equal reason to suspect Lippincott of being a double agent for Los Angeles. In early March of 1905, Lippincott had sent his entire engineering staff to Yuma, Arizona, on the Colorado River, to move the Yuma Irrigation Project forward at a faster pace. Work on the Owens Valley Project had been held up by winter and by the delayed arrival of a piece of drilling equipment which was on order. 

During the hiatus, the Reclamation Service received a couple of applications for rights-of-way across federal lands from two newly formed power companies in the Owens Valley. Each was interested in building a hydroelectric project, and Lippincott had to decide which, if any, of the plans could coexist with the Reclamation project. 

Unable or unwilling to look into the matter himself, Lippincott might have waited for one of his engineers to return later in the spring, but he wanted to dispose of the issue, so he decided to appoint a consulting engineer to look into the matter for him. And though there were dozens of engineers in Los Angeles and San Francisco among whom he could have chosen, he decided to turn to his old friend and professional associate Fred Eaton. 

The news that Lippincott had hired Fred Eaton to decide on a matter that could affect the whole Owens Valley Project left his superiors stunned, but their response, typically, was one of bafflement rather than anger. “I fail to understand in what capacity he is acting” was the only response Arthur Davis managed to give. 

Eaton himself had no questions about the capacity in which he was acting, though the public face he presented was very different. With his letter of introduction from Lippincott and an armload of freshly minted Reclamation maps, he strode into the government land office in Independence, claiming to represent the Service on a matter of vital importance to the Owens Valley Project. 

For the first three days, however, his investigations had nothing to do with the hydroelectric plans. Poring over land deeds in the office's files—deeds to which he might have had no access as a private citizen—Eaton jotted down a wealth of information on ownership, water rights, stream flows—things Los Angeles had to know if and when it decided to move on the Owens Valley's water. 

Handsome and charming, Eaton even managed to get the land office employees to help him, unaware that the information they were digging out had nothing to do with the matter that had allegedly brought Eaton there. When he finally had what he felt he needed, he turned to the official matter at hand. 

The problem of the conflicting power-license applications was straightforward; there could only be one resolution. One of the two Power companies, the Owens River Water and Power Company, held water rights senior to those of its competitor, the Nevada Power Mining and Milling Company. Its rights even predated those of the Reclamation Service, and if it was refused its application it might cause the Service some real legal embarrassment. 

In addition, its plan of development was far more compatible with the Reclamation project than the Nevada company’s. Jacob Clausen had taken a cursory look at both and decided that the Nevada company's project could reduce the Long Valley reservoir to a glorified mudflat during the peak summer irrigation season, when water was needed most. 

To Clausen, the applications were hardly worth a second look, and he couldn't understand why Lippincott had even bothered to hire someone to review them so carefully. The Owens River company deserved a conditional go-ahead, the Nevada company decidedly did not. But Clausen was far too naive to understand the complexity of such matters: One of the founders of, and partners in, the Nevada Power Mining and Milling Company was a rancher named Thomas B. Rickey. 

Eaton's baffling recommendation in favor of the Nevada Power Mining and Milling Company threw Clausen into a state of apoplexy. When Lippincott formally endorsed his judgment a few weeks later, Clausen finally understood that something was terribly wrong. But how wrong even he could not fathom. 

On the 6th of March, exactly three days after Lippincott had hired Eaton as his personal representative in the matter of the power company applications, the city of Los Angeles had quietly hired its own consultant to prepare a report on the options it had in its search for water. The report had taken only a couple of weeks to prepare—most of the information was in Mulholland's office, and the conclusion was foregone anyway—and the consultant had received an absurdly grandiose commission of $2,500, more than half his annual salary. It was not so much a commission as a bribe. The money, however, was well spent: the name of the consultant was Joseph B. Lippincott. 

One other person besides Jacob Clausen had begun to follow the comings and goings of Eaton, Lippincott, and Mulholland with more than detached interest—Wilfred Watterson, the president of the Inyo County Bank. Wilfred and his brother, Mark, were the most popular citizens in the Owens Valley. Their family had founded the bank, and Wilfred and Mark, when still in their twenties, became president and treasurer. Both were attractive young men, but Wilfred in particular was strikingly handsome. He had clean-cut, perfect features, an absolutely even gaze, and the erect, confident air of a 19th-century optimist. In his elegant clothes, Wilfred could have passed easily for Bat Masterson instead of a small-town banker. The lending policies of the Inyo County Bank were as much of an aberration as its owners. The Wattersons rarely refused a loan and often stretched out debts. They displayed a strong interest in the valley's survival and a casual, almost careless attitude toward money. 

Wilfred's suspicions that Los Angeles was engineering a water grab had begun to simmer when word got around that Fred Eaton, the would-be cattle rancher, was offering some astonishingly generous sums for land with good water rights. There were stories that Eaton would make an offer that already seemed generous, and, if a landowner gambled and tried to raise him, Eaton would readily meet his terms. It was hard for Wilfred to nail any of this down, because no one wanted to let the Wattersons know that he was thinking of selling out—not after they had loaned money with such abandon up and down the valley. But the stories were enough to make Wilfred skeptical about Eaton's true intentions. Was he rich enough to pay those prices? Where did he get the money? 

Watterson's suspicions became intensely aroused one day in the early summer of 1905 when an unidentified young man arrived in the valley, went directly to the Inyo Bank, and displayed a written order from Fred Eaton to pick up a parcel in a safe deposit box. As soon as he had it in his hand, the young man left with unseemly haste and stalked down the street in the direction of the post office. Watterson sprang up from his desk and asked the teller who the man was. He was Harry Lelande, the Los Angeles city clerk—the official legally charged with handling any transactions for the city that involved transfers of water or land. 

Watterson burst out the door and ran down the street in the direction in which Lelande had disappeared. He found him across the street from the post office. 

Watterson ambled up to Lelande, accosted him in his disarming manner, and said, “I’m sorry, Mr. Lelande, but there's a small formality we forgot to carry out at the bank.” 

Lelande looked perplexed. Watterson asked him to follow him back to the bank. Once they were safely inside the president's office, Watterson offered the clerk a seat and some coffee, then walked casually to the door and locked it. “We want the deed back,” he said. 

Lelande looked stricken. “What deed do you mean?” he asked. 

“The deed by which your city is going to try to rape this valley,” Watterson answered. 

“I haven't any idea what you're talking about.”

“Maybe this will help,” said Watterson. He opened his desk drawer, removed a revolver, and put it on top of the desk. Lelande's mouth opened. “I can't give you something I don't have,” he begged. 

Watterson stood up and hovered menacingly over the clerk. “Take off your coat and trousers,” he said. 

Lelande, badly frightened, obliged. Watterson turned all of his pockets inside out and found nothing. He ordered Lelande to get dressed and take him to his room at the Hotel Bishop. 

“Eaton's been buying land in an underhanded way to secure water for the city of Los Angeles, hasn't he?” Watterson said to Lelande on the way over. He was inventing the theory as he walked, but Lelande's agonized expression told him he was right. “You've paid high prices not because you're dumb but because you're smart. You're masquerading as investors and all you're going to invest in is our ruin.” 

Lelande kept insisting that he didn't know what Watterson was talking about. At the hotel, Watterson nearly tore apart his room, but found none of the documents Lelande had extracted from Eaton's box. It was obvious that Lelande had been so fearful of being discovered that he had immediately run to the post office and mailed the deed. Without the document, Watterson had nothing to go on but his hunches, and he was forced to let Lelande go. But, his temper notwithstanding, he knew he would have had to let him go anyway; the clerk had done nothing against the law. 

Neither, from what he knew, had Eaton. Was it possible, Watterson asked himself, that a distant city could destroy the valley he and his family had worked so hard and gambled so recklessly to build up, and never step outside the law?