Statement of the Problem 7 



this took the form of stream diversions to irrigate fertile land 

 within reach and appropriately located with respect to stream 

 elevation. Such undertakings in many, if not all, cases could be 

 achieved by settlers individually. Investment in these activities did 

 not employ the financial markets. Diversion structures represented 

 essentially an investment of time and labor, and of materials avail- 

 able with the expenditure also of time and effort. This does not 

 imply that the undertakings were without cost, for the investments 

 were made at the expense of current consumption which would 

 have been possible in greater degree had time, effort, and materials 

 been applied directly toward ministering to immediate wants. 



The settlement of the basin continued; growing communities 

 required water for domestic needs, industrial purposes, and disposal 

 of community wastes; the demand for energy expanded. Increasing 

 volumes of agricultural produce and timber rafted down the rivers 

 suggested to enterprising elements in the valley the potential 

 feasibility of power-driven river craft. The contrivances that had 

 transformed a small portion of the productive potential of the 

 basin's streams to beneficial uses during the previous generations 

 proved inadequate. Central water supplies, developed by impound- 

 ing surplus flows in retention basins for release during seasonally 

 deficit periods, supplanted the cruder diversion structures. Larger 

 reservoirs located in the more distant mountains, and canals to 

 convey the increased regular supplies of water, were built to extend 

 the distribution of water to areas previously having no access to 

 surface sources of supply. 



A proliferation of new institutional devices developed in response 

 to the needs of the valley residents. New enterprises — private irri- 

 gation, canal, power, and water companies and public irrigation, 

 water improvement, and conservancy districts — were launched dur- 

 ing this period, either to develop sources of supply, or to distribute 

 to local consumers the supplies developed by others. The capital 

 markets were employed to raise necessary funds for these ventures; 

 stock companies issued equity securities as well as debt instruments. 

 Mutual companies were tried, found to be inflexible, and aban- 

 doned. Most speculative stock companies failed; few survived bank- 

 ruptcy and reorganization. The public district device, enjoying 

 quasi-governmental powers to levy assessments against district resi- 

 dents for repayment of financial obligations, emerged as the more 

 stable institutional arrangement for the purpose. Extensive use of 



