12 BULLETIN 913, U. S. DEPARTMENT OF AGRICULTURE. 



into contract with construction companies which build the works 

 and sell water rights to settlers, while the States sell the lands. The 

 States sell land only to purchasers of water rights and the com- 

 panies sell rights only to purchasers of land. 



Water rights ,are usually sold on deferred payments, and the 

 notes given for deferred payments are made liens on the settlers' 

 interest in the lands and each agrees to give a mortgage on the land 

 itself as soon as he gets title. 



The contracts usually provide for the delivery of a fixed quantity 

 of water per acre per year, or for the continuous delivery of a stream 

 of a given size for a given acreage, but they provide also that in 

 case of shortage the supply available shall be divided among all 

 users in proportion to the acreage. Here, as in the other types of 

 enterprises discussed, the relation of the water supply of the com- 

 pany to the total acreage in the enterprise is the important considera- 

 tion, and not the quantity of water named in the contracts. 



Most Carey Act contracts provide that the projects shall be turned 

 over to stock companies of the type described, when a certain pro- 

 portion of the rights are sold. Purchasers of rights receive shares 

 of stock in the new companies, so that when the rights are paid for 

 the works belong to the water users. 



COMMERCIAL COMPANIES. 



Commercial companies have all sorts of plans for disposing of 

 water rights, but their contracts have a general similarity. The 

 laws of many of the States prohibit the sale of rights which merely 

 allow the purchaser to get water upon the additional payment of 

 annual charges. In consequence, almost every plan provides that 

 the purchaser of a water right shall secure an interest in the works 

 and rights belonging to the company. Usually the plan is the same 

 as that followed in Carey Act enterprises — the exchange of the 

 water-right contract for stock in the company when a certain pro- 

 portion of all the rights in the company is sold. These contracts, 

 like the others, fix the quantity of water to be delivered, the land 

 on which the water is to be used, and the charges which are to be 

 paid annually until the works are turned over to the contract holders. 

 Here, again, water is to be prorated in times of scarcity. 



It is seen, therefore, that under practically every type of enter- 

 prise, no matter what the nominal quantity of water to be delivered 

 may be, the actual quantitjr is a share in the available supply, based, 

 in most instances, on the acreage owned, but in mutual companies 

 on the number of shares of stock owned. 



In 1919 Montana enacted a law creating an irrigation commission, 

 and providing that any parties wishing to sell water or water 



