LAND RECLAMATION POLICIES IN THE UNITED STATES 15 
It was believed by the promoters of private enterprises that their 
inability to force the owner of land for which a water supply had 
been provided to contribute to the cost by the purchase of " water 
rights " was the principal reason for their financial failure, and that 
the organization of districts would remedy this. In accordance with 
y this idea, the original safeguards contained in the district laws con- 
sisted o,f provisions for such public supervision of the organization 
of districts as would make assessments binding upon land included 
against the will of its owners, and for testing in the courts the 
validity of the proceedings for organization and for the issuing of 
bonds. 
These provisions disregarded, so far as public inquiry or investiga- 
tion are concerned, all engineering, agricultural and economic ques- 
tions. Under them a great many districts that were not economically 
and financially feasible were organized and issued bonds. Most of 
these early districts failed to meet fully their financial obligations 
and bond purchasers were compelled to take total or partial losses. 
This largely destroyed the market for district bonds, or caused their 
sale for less than par. The laws fix a minimum price at which bonds 
may be sold, but these laws are evaded by paying for construction 
work with bonds, the price of the work being fixed in accordance 
with the discount on the bonds. 
Public investigation and report on the feasibility of plans for pro- 
posed districts was the first remedy adopted. The State officials 
charged with the duty of reporting upon districts generally were 
not given authority to veto their organization, but merely to report 
upon their feasibility. However, an adverse report usually amounted 
to a veto, as it would go far to prevent the sale of bonds, which 
was already difficult. 
The next step was making district bonds legal investments under 
certain conditions for trust funds and public funds, and for in- 
surance companies, banks, etc. California was the first State to 
enact such a law (1913). This law creates a bond commission, 
which investigates: (1) The water supply; (2) the soil and its 
probable water requirements; (3) the feasibility of the plan for 
supplying water; (4) the reasonable market value of the water, water 
rights, and irrigation works of the district; (5) the reasonable mar- 
ket value of the land in the district; (6) whether the proposed bond 
issue, together with others that have been issued or proposed, exceeds 
60 per cent of the value of the water, water rights, works, and land ; 
and (7) the character and number of bonds proposed to be issued. 
If the commission reports favorably on all these points the bonds 
are certified by the State comptroller and become legal invest- 
ments for the types of investment mentioned. 
x \ Similar laws have been enacted in Arizona. Colorado, Idaho, 
Montana, Nevada, Oregon, and Utah. The Utah law was repealed 
in 1923. 
It is to be noted that State certification carries no State guarantee, 
and that the certification laws make the investment of trust and pub- 
lic funds permissible, but not mandatory. Trustees and public offi- 
cials must still exercise ordinary discretion as to such investment of 
the funds in their charge. The object of the law is not, primarily, to 
induce the investment of the funds mentioned in district bonds/but, 
rather, to improve the standing of such bonds in the general market. 
