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Show DELTA LAND AND WATER OFFICIALS ARE INDICTED The news of the indictment of the officers of the Delta Land & Water Company has created a variety of emotions, the variety depend- ing on the individual. From the standpoint of the owner of land or interests on the project or in the town of Milford. the action means simply that we have received another black-eye. There is no doubt that the Milford project is fundamentally sound even it it was over-esti- mated and over-advertised by certain selling agents whose only inter- est was to secure the commissions allpwed as such agents. The land is excellent, the climate is one of the most healthful in the United States, and the water proposition will be adjusted eventually to supply all land in cultivation. The company was exploited by unscrupulous selling agents who conducted the selling campaign in a most extrava- gant manner and who filed reports to their superiors which gave the impression that everything 'was just as they represented it to be. The present actioh is brought by the Post Office Department of the Gov- ernment. No matter what the outcome, it does not- bring back any money to the settlers who gave up their ranches and left the country. There are probably very few if any of them but that would have been better off today had they stayed here and improved their land. The company has even this year expended about $100,000 to Improve the project water supply and has not collected one dollar for principal or interest from the settlers. The company cannot hope to make any- thing from the project unless the settlers make good and the manage- ment has shown every inclination to make such a result possible. The outcome of the criminal proceedings will be patched for with great interest. - The Associated Press account "Following the arrest at Los Angeles An-geles yesterday of Charles E. Arnold, former treasurer of the Delta Land & Water company, on a charge of using the mails in a scheme to defraud, de-fraud, three Salt Lake men, officers of the organization or , recently connected con-nected with it, were arraigned during dur-ing the afternoon before Henry V. Van 'Pelt, United States commissioner commission-er at Salt Lake, on indictments returned re-turned by the federal grand jury at the California city.' "The Salt Lake men pleaded not guilty of attempting to defraud investors in-vestors in the company, and were ordered or-dered to appear before the court at Los Angeles the second Monday in January. Each was released on bonds of $2,5 0 0. They were: Walter I. Moody, president; George A. Snow, former vice-president, and Henry B. Prout, second vice-president. "Others indicted are: Miss Gertrude Holmes, clerk and stenographer of the Milford office, now of Stevens-ville, Stevens-ville, Mont.; Lloyd Sigler, former president of the Western Securities company, now residing at Jerome Junction, Ariz.; Arthur P. Moran, former secretary of the Western Securities Se-curities company, residing near Fresno, Cal., and Mart Adson of Los Angeles, who preceded Mr. Moran as secretary, and who now is in Denver. Snow Makes Statement " 'The indictments are based upon alleged conspiracy to fraudulently use the mails in circulating matter advertising land and water under the Milford project. Were it not for my full consciousness that injustice had been done through lack of proper understanding, i woum reel tne situation sit-uation very seriously. Under the circumstances, however, I feel that justice has been outraged and shall ask my friends and the Utah public in particular to reserve judgment, accept this statement and await the result of a full hearing later before the court.' "The forggoing statement was made last night in explanation of the indictments, by Mr. Snow, who resigned re-signed his position with the company com-pany in August, but who is familiar with the situation, and was corroborated corrobor-ated by Mr. Moody, president of the organization. "The Delta Land & Water company, com-pany, a Nevada corporation, about four years ago began the exploitation of Beaver valley, near Milford, Utah, where it had a tract of 15,000 acres that was largely disposed of to set-I set-I tiers on contract at the rate of $100 Ian acre. Of this $70 went to the j Beaver County Irrigation company for a share of stock in that corpora-! corpora-! tion, and $30 for the land. One share of water stock must accompany title to each acre. For the most part the land was purchased by the company from private owners, but much of it was secured under the provisions of I the Carey act. Claims Equal Chance " 'It should be lfrne in mind that an indictment means that merely a sufficiently interesting story has been fob! by one side to appear to warrant war-rant a judicial. , investigation,' Mr. Snow's statement asserts. 1'pnn its i face it seems unfair that both iides on tne indictments is as ronows: should not be afforded the same opportunity op-portunity to appear before the grand jury, but this is not the rule. " 'The Delta company has expended expend-ed roundly, $2,500,000 in this state alone in building the Delta project in Millard county and the Milford project in Beaver county. The company com-pany was-financed completely by its own stockholders, not a share of its stock nor bonds or securities of any kind sold to the public. All mortgages mort-gages taken from the settlers are in the company vaults and have been from three to seven years, with no hope of getting this money back except ex-cept from the farmers, who in turn must be successful in order to pay their obligations.. Certainly no fraud, has been perpetrated in financing the company, and I submit that logic fails to .suggest it would be to the Advantage of the company or its officers of-ficers to defraud the settlers who went upon the land a:nd who, in the final analysis, must pay the bills. "Business-Hunting" Lawyers " 'These California settlers, some of whom were without previous experience ex-perience in the pioneer work of subduing sub-duing sagebrush land, expected to grow the bounteous crops being raise'd on the adjoining farms at Minersville. They underestimated the time and outlay necessary to ob tain the cherished results. All did not know how properly to lay out their farms for the economical use of water in irrigating. The results they did obtain were not materially different from those obtained the first few years elsewhere on new desert des-ert lands. Utah people familiar with land in the vicinity of Minersville know this to be one of the most fer tile sections in the state. " 'The installment payments owing ow-ing to the company by most of these settlers were overdue, so that altogether alto-gether the situation was disappointing disappoint-ing and, while in this disturbed frame of mind, a business-hunting lawyer, with a keen appetite for fees, came, to Milford. Mr. Moody and 1 were both out of the state at the time and he called the settlers together to-gether and induced a number of those who came from California to abandon their farms and return to their former homes, with assurances that he would recover the money they had paid, with damages, and he tied them with a contract so none could make an adjustment with the company. Suits Consolidated " 'A large number of suits were launched in various localities in California Cal-ifornia where these settlers formerly j resided, alleging fraudulent repre-: I sentations. All these suits but four' ; were transferred to the federal : courts of California and later the service was quashed. The remaining four suits were consolidated and ' , tried in the superior court at Los , Angeles during last June. One of the counsel for these dissatisfied settlers set-tlers was formerly identified with the United State's district attorney's office of Southern California and 'knew the ropes' of that office. More than four months have elapsed since the trial of these cases and the findings find-ings of the court have not yet been (Continued op last page) t t continued from page li DELTA OFFICIALS ARE INDICTED made. These indictments liave now been brought in while the decision of the state superior court is still pending. pend-ing. " 'Some 5000 acres of this Milford , land, or water for it. - was sold to Utah people, nearly all residents of Minersville and elsewhere in Beaver 1 county, the land with water stock having been sold at $100 per acre-share, acre-share, or $70 per share for the water stock only. All these settlers are on their land, also a number of the settlers who came from California who were unwilling to follow the lead of the trouble-making lawyer, and tlfere is no litigation with any of the settlers; yet, generally speaking, speak-ing, the land of one is as good as that of the other. Good crops are being grown on this land, and 1 doubt if these farms, or the farms of those who abandoned and returned return-ed to California, can now be bought at less than from $100 to $125 per acre. There may have been some breezy statements in the literature, as seems characteristic of advertising advertis-ing of this nature, but the real question ques-tion is: Was a fraud committed with fraudulent intent? I say not, nor anything approaching it, but this Is a point upon which the court will finally rule, and I am not especially concerned about the outcome.' Charles E. Arnold Taken in Custody; Gives $2500 Bond "Los Angeles, Nov. 17. Charles E. Arnold, treasurer of the Delta Land & Water company, residing at 3044 Congress place, Pasadena, was taken into custody toady under an indictment returned by the federal grand jury several weeks since, charging him with using the mails in a scheme to defraud. Mr. Arnold was a banker of Milwaukee and for several years has been making his winter home in Pasadena. - "He was arraigned before United states uommissioner HammacK and held under $2500 bond, which he promptly gave. "Following the arrest of Mr. Arnold, Ar-nold, Joseph L. Lewisohn, his attorney, made a statement to the effect that the action of the federal authorities was a surprise, but the company and his client courted the fullest investigation. Both understood under-stood that litigation was pending on the part of .disgruntled purchasers of the land, butjt was not expected that it would turn out this way. Lengthy Litigation "He said Mr. "Arnold owns but one share of stock in the Delta Land & Water company and that the concern has been conducting a practical enterprise en-terprise in Utah, one approved by the most competent engineers. They had indicated their faith in the enterprise en-terprise by investing much money i the improvement of tjie land, furnishing furn-ishing water for irrigation, etc. The litigation involving the operations opera-tions of the Delta Land & Water company has been in the superior and federal courts in Los Angeles for several years in one form or another. an-other. The original suit was filed in the superior court, in behalf of eighty-six individuals who had purchased pur-chased contracts from the company and" alleged that they had been lm-nnsed lm-nnsed nnon hv the misrenresenta- tions of the selling agents. Later the omnibus case was transferred to the federal court. "The defendants in both actions were W. I. Moody, president of the Delta Land & Water company; Lloyd Sigler, former president of the Western West-ern Securities company; Charles E. Arnold, and the Western Securities company. The last named corporation, corpora-tion, it is alleged by Clark E. Webster, Web-ster, postoffice inspector, who made the investigation in behalf of the government, is the selling agent . of the Delta Land & Water company, made up of about the same men, with an interlocking directorate. The amount invested in the scheme by Individuals, according to the same .authority, is in the neighborhood of $400,000. Contracts after small initial in-itial payments were made to cover mortgages on other property owned by the investors, and in a number of cases these instruments were foreclosed fore-closed on the failure or' refusal of the parties to pay the amount called for by the contract. First Hearing "The first hearing of the case in the United States district court was before Judge Trippet, and resulted in a signal victory for the defendants, the service of summons being quashed. quash-ed. It being shown that it had been illegally made, in the view of the court. That was the end of the case from the civil point of view in the federal courts. "Later, Harry T. Perry, in behalf of four other investors, brought action ac-tion in the superior court at recession of their contracts, and they were successful. suc-cessful. Judge Frank R. Willis finding find-ing that there was an insufficient supply of water, not enough to make : good the obligations of the contract : in that regard. The court was of the opinion, it is alleged, that no fraud ; was practiced in the sale of the land. but that the irrigation proposition j had not been fully carried out. In that proceeding it was shown by the testimony -that all of the plaintiffs had visited the land and" ought to have known just what they -were buying. buy-ing. The official finding in that case has not yet been signed by the court. The judgment of Judge Willis was delivered on September 12, last. "Following this a number of the investors living inthe Imperial valley, val-ley, who had lost by their contract, as they claimed, held a meeting in that section and memorialized United States District Attorney Robert J. O'Connor to prosecute certain of the officers of the Delta Land & Water company and the Western Securities company for their part in the transaction. trans-action. The indictment returned some time ago is the answer to that request. Blames Investors "General misrepresentations as to the -character of the land located in Beaver county, Utah, both as to its quality and the climate in that part of the state, form the basis of the indictment. in-dictment. It was claimed by the selling sell-ing agents that the Delta Land & Water company owned the land, that it was of rich soil, free from alkali, and admirably suited to the growth of alfalfa, wheat, oats, barley, potar-toes, potar-toes, sugar beets and other vegetables vege-tables and grains. It is alleged on the part of the investors that the land, instead of being a rich agricultural agricul-tural section, is made up of barren waste land, of desert character, where the climate precludes the possibility pos-sibility of growing good crops, and that the claim that the company had $1,000,000 invested in a water system sys-tem to carry the waters of Beaver ! river to the land of the colonists was ; untrue. "Whatever the merit of the contending con-tending factions as to the facts, it is not denied that scores ef persons invested in-vested in the land. Some stayed on it a year or two and returned, claiming claim-ing they had been imposed on; that the representations made were not true either as to the fertility of the ' soil or the opportunity to grow crops on it. It is a part of the story of the enterprise that more than one investor in-vestor found himself impoverished. "Friends of the defendants allege j that the investors themselves are to blame for their predicament; that they went there after they had seen the land and knew all about climatic and other conditions; they had their eyes open on every feature of the investment. in-vestment. It U further asserted that the land was raw. as an agriculturist must know, and that under such conditions several years are required to get the land so that it will produce pro-duce crops. It is said by the pro- j moters of the enterprise that the investors in-vestors became discouraged before it was possible to get best results from the land in a word, that their financial finan-cial losses can only be laid at their own doors, own doors, having failed to carry out the first principles of farming in a new country." |