Rape of the Owens Valley

At the start of the 20th century, the United States Bureau of Reclamation was planning on building an irrigation system to help the farmers of the Owens Valley, which would block Los Angeles from diverting the water.

Eaton and Mulholland used underhanded methods to obtain water rights and block the Bureau of Reclamation. The regional engineer of the Bureau, Joseph Lippincott, was a close associate of Eaton, Eaton was a nominal agent for the Bureau through Lippincott, so Eaton had access to inside information about water rights and could recommend actions to the Bureau that would be beneficial to Los Angeles. In return, while Lippincott was employed by the Bureau, he also served as a paid private consultant to Eaton, advising Los Angeles on how to best obtain water rights.

To help acquire water rights, Eaton posed as a cattle rancher, willing to overpay for land. Eaton bought land as a private citizen, hoping to sell it back to Los Angeles at a tidy profit. Eaton claimed in an interview with the Los Angeles Express in 1905 that he turned over all his water rights to the City of Los Angeles without being paid for them, “except that I retained the cattle which I had been compelled to take in making the deals … and mountain pasture land of no value except for grazing purposes.”

Mullholland also participated in misleading others. In Los Angeles, Mullholland influenced public opinion by dramatically understating the amount of water available for Los Angeles’ growth. Mullholland also misled residents of the Owens Valley, by claiming that Los Angeles would take water only for domestic purposes, not for irrigation.

In the end, between acquiring key water rights and lobbying Theodore Roosevelt, Eaton and Mullholand were able to cancel the Bureau’s irrigation project.

Many argue that Los Angeles paid an unfairly low price to the farmers of Owens Valley for their land. Β Gary Libecap of the University of California, Santa Barbara observed that the price that Los Angeles was willing to pay to other water sources per acre-foot of water was far higher what the farmers received. Farmers who resisted the pressure from Los Angeles until 1930 received the highest price for their land; most farmers sold their land from 1905 to 1925, and received less than Los Angeles was actually willing to pay. However, the sale of their land brought the farmers substantially more income than if they had kept the land for farming and ranching. None of the sales were made under threat of eminent domain.

The aqueduct was sold to the citizens of Los Angeles as vital to the growth of the city. However, unknown to the public, the initial water would be used to irrigate the San Fernando Valley to the north, which was not at the time a part of the city. A syndicate of investors (again, close friends of Eaton, including Harrison Gray Otis) bought up large tracts of land in the San Fernando Valley with this inside information. This syndicate made substantial efforts to support passage of the bond issue that funded the aqueduct, including creating a false drought (by manipulating rainfall totals) and publishing scare articles in the Los Angeles Times, which Otis published