‘Continued prosperity for the Kishi colony seemed assured as the 1920's drew to a close. The colonists had the latest in farm equipment, including tractors, and used the most modern farming techniques. Still nothing could be done when their entire cabbage crop contracted "yellow disease" and was destroyed. Successive freezes then destroyed other crops and the colony's orchards. Quite suddenly Kishi found himself financially overextended. At that inopportune moment the Great Depression was blanketing the nation, suffocating any chance of the small colony's recovery. Kishi had mortgaged his land earlier to borrow money to expand his search for oil, and now the loans were due.‘
Correspondence between Kishi in Japan and his son, Taro in Texas chronicle the desperate struggle to save the colony. After foreclosure, Lutcher Stark offered Kishi an opportunity to buy back the property. Stark said, “he did not wish to make extra money, nor royalty, nor oil or mineral interest.” “Lutcher Stark says that he will do every thing within legal bounds to help you, as his wishes are for your success.” Kishi had until July 15, 1931 to put up $20,000 earnest money. Kishi had leased the land from Stark and the colonists were truck farming by raising cabbage and mustard. Tokuzo Hirasaki said if the new irrigation canal had come a few years earlier, they might have been able to return to rice farming and repay the notes. Kishi was staying at the residence of his brother in law, K. Kobayashi at 110 Suwa, Tozuka-Machi, Tokyo, attempting to raise funds. His messages were telegraphs written in code. His son Taro wrote typed letters from Texas and several times had to ask for remittance for gasoline for the tractors, pay for the workers, and groceries. He was quoting the price of oil from the East Texas Field as $0.10 to $0.25 per barrel as if Kishi was attempting to find a market in Japan. Meanwhile, Gulf Production Company drilled a well on the property on May 21. It was almost touching the west boundary of the Orangefield High School tract and 285 feet north of the highway. The well was drilled to 5,801 feet but it was not productive. An Orange Petroleum Company well was reworked and producing at 125 barrels per day. There was a flurry of correspondence seeking to extend the deadline of the earnest money until July 30. When Taro went to visit Stark on August 4, the family had already left for a vacation in Maine.
The notes passed into possession of the Lutcher Moore Lumber Company and San Jacinto Life Insurance Company. They sought to recover $109,654.84 from Kishi. The law firm of Kennerly, Williams, Lee, Hill, and Sears partitioned to recover $195,892.48 from him. In addition each company wanted to recover interest at a rate of 10% on notes past due and 10% as attorney’s fees. Having no way to repay his debts, Kishi lost all 9,013.1 acres of his land to creditors in September 1931. Texas laws had allowed one to protect 200 acres of land as a family homestead. However, when Kishi saw that the forced sale was not enough to cover his debts, he abandoned his lawful claim to his homestead and presented it for public sale. He valued personal integrity and reputation more than temporary material gain or monetary profit.
Because the colonists had always leased their land from Kishi, they were forced to scatter when his mortgage was foreclosed. Some resettled on farms in the Lower Rio Grande Valley, while others went to Arizona and California. A few, including the Kishi, Nagai, and Kondo families, stayed in the Orange and Beaumont area and rode through the hard days of the depression.
After losing their land Kichimatsu and Fuji Kishi became dependent on their son, Taro, and their daughter, Toki and her future husband, Tokuzo Hirasaki. Hirasaki continued to farm by leasing the land from the new landowner, Lutcher Moore Lumber Company. Taro had graduated from Texas A&M and worked on the family farm. Around 1931, Taro took a job with Mitsui and Company, which conducted business in the New York. There, Taro married to Mary Otani of Plainfield, New Jersey. She was born at Blessing, Matagorda County. Her father was a cousin to Kiyoaki Saibara of Webster. After war broke out in the Pacific, Taro returned to Texas and his marriage to Mary ended soon after. In 1944 he started to farm rice in Jefferson County near Nome and China.