IRRIGATION DISTRICT OPERATION AND FINANCE. 19 
to issue bonds. This feature probably commands more widespread 
interest in irrigation district activities than does any other phase of 
its operations. That the bonding privilege has been the outstanding 
inducement toward the formation of districts is indicated by the fact 
that 83 per cent of all districts now in operation or undergoing 
construction have voted bonds, and that 79 per cent of all such 
districts have sold all or portions of their bond issues. 
The bond of an irrigation district contains a promise to pay a 
definite sum at a definite date, with attached interest coupons payable 
annually or semiannually, the security lying in the district's power 
and duty to levy annual assessments upon all of the lands benefited 
in order to secure funds for paying the principal and interest as due. 
In case of neglect or refusal of district or county officials to levy 
such assessment, bondholders may compel such levy by mandamus 
proceedings. 
Bonds must be authorized by vote of the district electors, prior to 
issue, in all States except Montana and Wyoming. In Montana, 
however, a petition must first be filed with the district commissioners 
by a majority in number and acreage of the title holders. In 
Wyoming, after the assessment for construction has been confirmed 
by the court, the district commissioners without further authorization 
may issue bonds not exceeding the amount of the assessment. An 
investigation of the feasibility of proposed plans is a prerequisite in 
some States. 
Validation. — So vital is the question of the legality of district 
bonds that the California Legislature early provided a means whereby 
the directors of a district could bring a special action in court to 
determine and confirm the validity of proceedings leading up to and 
including the bond issue. This feature has been adopted by the other 
States with the sole exception of Kansas, some of which States make 
the bringing of such action mandatory. The strength of this meas- 
ure lies in its assurance of determining the legality of bonds prior to 
their sale and before such legality can be called into question against 
the interest of purchasers.- The various statutes also provide that 
groceedings in connection with assessments, contracts with the United 
tates, and other acts may be tested in the same way. 
Certain bond issues in large amounts sold during the first six years 
of irrigation district operations in California, and in 1911 in Colorado, 
were subsequently declared null and void by the courts. With the 
ample means now provided for assuring validity, there would seem 
to be little need of a repetition of this experience. 
Interest rates — Capitalization of interest. — Most of the statutes pre- 
scribe that irrigation district bonds shall bear interest at a rate not 
exceeding 6 per cent per annum; three, however, provide that the 
interest rate shall be 6 per cent, and several laws fix the limit at 7 per 
cent. Bonds issued in behalf of local improvement districts are 
usually authorized to bear a higher rate of interest than the usual 
district bonds. In most States interest must be paid semiannually, 
usually on January 1 and July 1 . 
In order to give irrigation districts an opportunity to get on a 
paying basis before demands for interest shall fall due, it is now 
provided in the majority of the States that the first one to four years' 
interest may be included in the amount of the bond issue. 
