44 BULLETIN 1177, U. S. DEPARTMENT OF AGRICULTURE. 
of their activities, it is realized that the difficulties in which so many 
irrigation districts became involved, before the idea of speculation 
became generally superseded by that of effective State control, are 
not unique in financial annals. 
A great many of the early districts were involved in litigation on 
one point or another, largely as the result of the opposition of 
landowners unwillingly included, although the earliest districts were 
undoubtedly bona fide enterprises and free from speculative features. 
After a few years, however, speculation and promotion of irrigation 
district schemes became rife and brought with it the train of misfortune 
that usually follows such unhealthy development. It is true that 
the bonding of irrigation enterprises was a new departure in irrigation 
development in the United States and that much had to be learned 
of the soundness of and security for such bonds; but it is also true 
that excessive optimism, fraud, carelessness in the matter of water 
supply, and the use of this new means of promoting land sales entered 
largely into many district enterprises. On the other hand, some 
legitimate and entirely feasible undertakings that were started were 
carried under in the reaction that followed the panic of 1893. Several 
of the feasible districts managed to weather the storm and eventually 
to effect bond settlements which have been the forerunners of their 
present unquestioned success. 
THE PERIOD OF CONSERVATIVE DEVELOPMENT. 
Following the close of the first and generally disastrous phase of 
development no districts were formed for some years in any 
State but Nebraska. With the beginning of the present 
century, however, irrigation district activity began in Idaho and 
Colorado, shortly followed by Oregon, on a very conservative scale 
at first, but eventually increasing in extent, particularly in Colorado, 
until by the end of the first decade very many districts of a speculative 
character were issuing and disposing of bonds. Although no definite 
dale can be assigned as marking the close of the second period of 
district development, owing to the fact that it gradually merged 
into the third phase, the years 1906 and 1907 represent approximately 
the turning point. 
The conservatism shown in the formation and bonding of irrigation 
districts and the good that resulted during this period, while not so 
spectacukr as the financial failures of the preceding and immediately 
following years, are deserving of more than passing comment. In 
Nebraska and Idaho, and to a less extent in Colorado, the district 
was used largely for the purpose of taking over and reconstructing 
existing irrigation works, issuing bonds directly in payment for the 
works in some instances or selling them locally for improvements, 
the bonds thus being issued against an already established security 
and with an already developed earning power sufficient to pay the 
interest and principal of the bonds in addition to the cost of main- 
taining and operating the irrigation system. Such districts generally 
succeeded. Several Nebraska districts have completely discharged 
their bonded indebtedness, and others in all of the States mentioned 
have paid interest promptly and have retired such portions of the 
principal as have fallen due. This situation affords a striking con- 
trast to the two eras of speculation in irrigation district bonds. 
