108 IKKIGATION INVESTIGATIONS IN CALIFOENIA. 



The failure of past enterprises was chiefly due to two facts. In the first place, 

 everj'thing was undertaken without sufiicient knowledge, since the State has left its 

 citizens wholly in the dark regarding the irrigation industry. Without scientific 

 investigation of water resources and intelligent public supervision of projected 

 works, the tempting opportunities for reclamation and settlement ofl'ered by 

 the natural conditions of this basin proved simplj' an invitation to disaster. Large 

 sums were expended in trying to get water from sources and by methods which 

 were problematical at best. Costlj" earth dams were erected where thej' could not 

 hope to withstand the first flood. The result was peer aary loss for investors and 

 disappointments and hardship for settlers. These misfortunes, which would have 

 been prevented bj' a system of administration like that of W3'oming, gave the 

 country a bad name and injured the entire communit}-. 



In the second place, it has proven extremely difiicult to command large capital 

 for the irrigation industrj-. This is due in part to the uncertainties arising from the 

 California law, but yet more to the ill repute of irrigation securities in general. 

 These enterprises require large sums and, even under the most favorable conditions, 

 the returns are likely to be long delayed, since much time is necessarily consumed 

 in establishing the industrial economy of a new country and bringing it to a point 

 where it may pay regular dividends to capital. The results of private investment in 

 this field have been such as to lead many conservative men to favor some form of 

 public enterprise, though opposed to this method in other lines. 



But in spite of past failures the rich lands of Honey Lake Basin must be 

 reclaimed. The territory is needed for the homes of men and the desert must be 

 made to give place to the field, the garden, and the orchard. It will be profitable to 

 examine the several methods by which this might be accomplished and to consider 

 which of these is best adapted to the situation. 



THE WATEB-RIGHT SYSTEM. 



Nearly all the enterprises thus far undertaken in the basin have been planned on 

 the familiar lines providing for the sale of water rights and the collection of annual 

 rentals. The price of rights ranged from $5 to $10 per acre and the water rentals 

 from $1 to $1.50 per acre. Those who planned companies in this waj- expected to 

 recover their entire investment, and perhaps more, from the sale of water rights. 

 In that event the annual rentals would pay dividends on fictitious capital besides 

 meeting the maintenance charge. Pleasing as the plan looks on paper it has never 

 produced the expected financial returns. It has now been swept awaj^ by the decision 

 of Judge Ross, of the United States circuit court for the southern district of Cali- 

 fornia, rendered in the famous San Diego case. The conclusion is that there can be 

 no such thing as a water right in the sense that these companies and their consumers 

 understood it. Landowners having property under an irrigation canal have an 

 inherent right to demand water from that canal by tendering the price of it. This 

 price must be fixed on the basis of reasonable interest upon the actual investment. 

 The price is sul)ject to review and revision by the counts' board of supervisors, who 

 can not, however, fix it at less than 6 per cent nor more than 18 per cent interest on 

 the investment. This would usually mean the minimum amount, which is hardly 

 sufficient to tempt investment into this unpopular field. Furthermore, the provision 



