Title: Legislative Alternatives . Further Studies Needed
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Title: Legislative Alternatives . Further Studies Needed
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Abstract: Richard Hamann's Collection - Legislative Alternatives . Further Studies Needed`
General Note: Box 12, Folder 7 ( The Law of Water Allocation In The Eastern United States - 1956 ), Item 23
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LEGISLATIVE ALTERNATIVES. FURTHER
STUDIES NEEDED






DISCUSSION: Legislative alternatives:
a) Classification and reform of riparian law.


CHAIRMAN BEUSCHER: We will pick up from where we left off last
night. We got started under the general topic of "Legislation-what kind?"...
We had, as you recall, a suggestion about cut-off provisions in legislation,
if adopted. I am sure that someone may want to talk to the point of whether
we ought to have any legislation at all. You are privileged to do that. Also,
I think we will all agree that perhaps it doesn't make too much logical
sense to talk about legislation until we talk about the second thing-what
studies do we have, what do we know now, what do we need to know in order
to legislate. All these things are interrelated, and I think they will knit to-
gether as we go along. Let's start off with "Possible Legislative Alterna-
tives" ...
I thought perhaps it might be well to just point out to begin with that we
had a suggestion in one of our discussions* that perhaps all we needed to
do in some of the riparian states was to enact a statute that would say,
"The reasonable use doctrine shall prevail as to surface water, ground
water, possibly as to diffused water," and also say to the Court, in effect,
"There is such a thing as a hydrologic cycle. Pay attention to it in de-
ciding cases."
Is there anyone who wants to say anything about that as a way of going
at it? I suppose you could go on, if you wanted to, and say, "Well, these
ambiguities, some of them at least in the riparian doctrine, might be
cleared up in this kind of statute ... whether, for instance, one who owns
merely an easement along the bank can pump." This might raise some
constitutional issues. That is a possibility.
MR. MARQUIS: I think perhaps I may have made the suggestion. I
would say that in my mind it would not represent any final solution of the
problem, but that it might be helpful as an interim step, at least in states
Which are not ready to go further at this time.
MR. TRELEASE: Do you mean legislatures which are not ready to go
further, or the courts which are not ready to go further?
MR. MARQUIS: Or the people which are not ready to go further?
MR. TRELEASE: I wonder if you wouldn't raise much the same due-


See p. 526.






596 LAW OF WATER ALLOCATION

process arguments that some of these more drastic proposals would
raise ?
MR. MARQUIS: I would doubt it. I would think a mere redefinition of
common law and terms which other common law jurisdictions recognize
would not raise the due-process question.
MR. TRELEASE: Unless you get the person who claims that he always
has had this right to the natural flow and now the legislature has taken it
away from him.
MR. HABER: I would like to speak to that. As far as I know thus far,
and maybe Mr. Ellis can correct me from his experience, in the eastern
states there is very little real natural-flow doctrine. There is some talk
of it in various early opinions, but wherever you get recent cases, you get
a breaking away from the natural flow doctrine, and the only thing that you
can say is that in some states, as Mr. Ellis illustrated in North Carolina,
there are a number of decisions which are not clear, which contradict each
other, which seem to apply natural flow to some areas and not to others.
But I don't think that any court in an eastern jurisdiction would feel com-
pelled by the force of its precedent to say that we cannot possibly sanction
this statute because it violates a right which is so clearly established in
our state. So, if the legislation has any kind of merit at all, as this prob-
ably would have, I don't think that you are going to get a court to put it
back up again in the eastern states.
MR. TRELEASE: I don't know of any western experience either, except
that the California court had to decide whether or not an amendment to the
Constitution was constitutional once.
MR. HABER: As you know, the background* of that was that you had
very strong economic interests dependent on a particular doctrine of
natural flow, which, as far as I know, doesn't exist in any eastern state.
The only interests that would be dependent on that, as far as I know, would
be recreation users. They are protected by independent doctrines. They
don't have to rely on the natural flow doctrine. They can, in most in-
stances, rely on public rights to fishing, hunting, that exist in the so-called
public waters. There may be some recreational interest that might be
pushing for an extension to smaller waters, but the natural-flow doctrine
won't help them very much, because all that would mean is that the private
landowner in those smaller streams could use them for fishing, or what-
ever purpose, and they are not too concerned about him. There may be
some landowners like that that would be interested. But I don't think they
constitute a very important economic interest.


* See pp. 464-465, 485.






LEGISLATIVE ALTERNATIVES


DISCUSSION: Legislative alternatives:
b) Prior appropriation institutions and government
agencies operating under appropriation law but devel-
oping and distributing water on different bases.


CHAIRMAN BEUSCHER: We might ask some of our friends from the
West to describe how this so-called appropriation doctrine is really op-
erating down at the level where the water is distributed ... I have asked
three members of the group to say ten minutes' worth on this general
question of the appropriation system in operation, and anything else they
want to add ... Mr. Huffman, would you like to address yourself to that?
MR. HUFFMAN: When Professor Beuscher asked me if I would like
to make a few remarks this morning, I wondered a little bit what I might
summarize which would be worth your time. I thought I might be in the
same position as a friend of mine who gave a talk recently in a drought
area of the Southwest, and said that when he came out of the auditorium
he heard a couple of farmers talking. One said, "What did you think of the
speech?" And the other replied, "I think a half inch of rain would have
done more good." So, I will discuss a few points which may have some ap-
plication to eastern water law. As far as I am concerned, I would have to
admit that I am more of an institutional economist than a theoretical
economist, such as you heard in action yesterday.
As an economist, my first concern turns out to be, at least pretty
quickly, how do we go about implementing any economic model we put to-
gether; how do we apply it to a given situation? I suspect that the western
United States does illustrate some of the ways in which an institutional
pattern might be developed to fit a peculiar set of problems.
In this respect, I find myself again emphasizing the same point as be-
fore. Sooner or later whatever you come up with is going to have to pro-
vide for implementing and encouraging group action. In that respect, I
was encouraged, at least, that I wasn't too far off in my own thinking on
the kind of problem you might face in the East when I heard Mr. Jordan
say last night that you were going to have to be concerned with storage
and transmission of water. I had assumed that. I thought maybe that was
so because that is the problem in the West.
It seems to me this is one of the major elements involved in the prob-
lem of increasing the economic supply of water. If that is true, then you
face very much the same sort of problem that was present in the evolution
of western water law. In the West long ago the people recognized the im-
portance of group action and have organized their activity with respect to
water to promote andencourage_1t.
So, in trying to think how any kind of change in a water code or a new
water code might work, I think in that context. Specifically, I thought I






LAW OF WATER ALLOCATION


might describe for you, very briefly, one of the operational situations in
Montana where we have an operating state agency in the development and
use of water. This is not a state agency that administers water rights. I
might add that this particular state agency which develops water projects,
operates under what I consider to be the most cumbersome administrative
system for water rights that exists any place in the West.
In Montana ... anybody who wants water can go out and appropriate it.
In the beginning they did it by hanging a note on a bush alongside the stream
stating that they were appropriating so much water. Later, they began to
record it. In Montana we have no central system for water rights. They
are recorded county by county. Yet within that extremely cumbersome
management system, we have a state agency which has succeeded in carry-
ing on a considerable amount of water development over the last 20 years,
and has done it quite successfully.
Our Montana water conservation board was an outgrowth of depression
drought conditions, and this may account for the fact that it is the most
liberal enactment that the State Legislature ever passed. They passed it
under the pressure of depression and drought. In reading it, so far as I can
see, there is literally nothing that the Montana Water Board can't do in the
water resource field if they want to. So far, they have limited their activity
to irrigation development and the building of some small municipal water
systems for unincorporated towns and to providing engineering help for cer-
tain public activities, including primarily the building of REA projects.
In the process they have provided a primary water supply and a sup-
plementary water supply for approximately 450,000 acres of land. This
may be as much as 5 times what the Bureau of Reclamation has developed
in the State of Montana in the same period in the way of new land, in spite
of all the emphasis on federal development. The first developments in-
volved federal grant funds during the drought days. There have been no
federal grants for at least the last 10 years.
Other than that, development has been financed by appropriations from
the legislature, which are subject to repayment, plus water revenue bonds,
which have no security except income from the project. They are not a
lien against the state itself.
This system has operated quite successfully. I want to illustrate some
of the things accomplished under the appropriation doctrine which indi-
cate that we are not entirely correct when we say that it is inflexible.
When I first started working closely with the problem of water law as re-
lated to economic development, I was much more concerned about the
problem of inflexibility than I have been recently. In fact, I have written
some things saying that it was highly inflexible, that it tended to restrict
development, which it does, but the degree of the restriction is the im-
portant thing. Mr. Fisher, in his paper, quoted one of my statements.
So far as the appropriation doctrine is concerned, it is still an evolving
thing, as I think was pointed out here yesterday afternoon. There are






LEGISLATIVE ALTERNATIVES 599

changes being made in it in almost every year in the way it is applied
and the things done under it. It turns out, as very often happens, that it
may be a much more flexible kind of institution than many of us thought
at one time. The sort of thing that Mr. Fisher outlined in his paper is cer-
tainly appropriate criticism of the way in which it has operated...
The appropriation doctrine has shortcomings, but most of it is related to
the inefficiencies in water use. I think they could come under almost any
kind of system. The problem may depend on enforcement.
There have been cases where use has indicated that the appropriation
doctrine has considerable flexibility. For example, the Montana Water
Board has carried on some highly flexible kinds of development under the
appropriation doctrine. I might say that the Water Board is in exactly the
same position as any individual, as far as the law is concerned. If it wants
to carry on a development, it has to go to the state and file a water right.
That is exactly what it does. In the process, they have done some pretty
effective shifting in the uses of water. They have developed water for other
than agricultural use. We have one stream on which they have carried on
all the development. The Federal Government has stayed out of it in a sort
of gentlemen's agreement, whereby that stream is left entirely to the state
agency.
It is fairly typical, I think, in most of the western streams that the prior
rights are downstream. This probably results from the fact that in settle-
ment, in many cases, the people approached the stream from downstream
and worked up. The last settlement is upstream. As a result the upstream
users have the later rights, and they have to let the water run down to the
people below. On the stream I mentioned a moment ago that was true al-
most 100 percent. The State Water Board developed a dam about half way
down the stream. So now we find the people with the prior rights get the
stored water, the people above the dam get the stream water, but the
people above the dam who use the stream flow are the ones who pay for the
stored water. It is an exchange proposition.* So, we get more flexibility
than you might suspect.
This particular operation also ties in with another point which was
raised here, in that they operate on the basis of a water-sales contract.
This is interesting because it also reflects a little bit the sort of problem
in psychology that was implied here a couple of times. The people in Mon-
tana, working with their State Water Board are accepting and using a sys-
tem which they have fought and rejected, so far as the Federal Bureau of
Reclamation is concerned, namely, a system of water-sales contracts
rather than definite, set water rights.
The Reclamation Act of 1939 provides in Section 9 (e) for contractual
arrangements involving a sort of public utility arrangement, and it has been


* See pp. 607-608 for a similar example.







LAW OF WATER ALLOCATION


fought in most places in the West because it doesn't give the kind of as-
surance and certainty that people think they have to have in their water
rights. And yet, it has operated very well at the state level. A couple of
years ago I went to our State Reclamation Association meeting. Like all
good organizations, when they got done, they passed a series of resolu-
tions. They passed a resolution which in every way condemned 9 (e) con-
tractual arrangements with the Bureau and praised the State Water
Board. I asked the chairman of the Resolutions Committee, a good personal
friend of mine, "How can you do it?" He said, "Well, some of these people
don't really know the difference, and we have to keep everybody happy."
The point is, I think, they are willing to accept it because it is a state-
level arrangement and they think they can keep control of it, where they
are not so sure if they have that sort of arrangement with the Federal
Government.
As far as the local level operations are concerned, the Water Board
operates through water users' associations, who operate the systems en-
tirely. The Board does nothing but store or pump water, deliver it and get
paid for it. The interesting thing, too, is that these people who are so con-
cerned with water rights have nothing except what is termed after 20
years a paid-up water contract, which is apparently only a fractional in-
terest in a water right which was filed by the State Water Board. They
don't have what they are willing to go out and shoot each other over, and
still do occasionally. It has been only a year ago last summer that we
had our last shooting in a dispute over water. People don't always go into
court; they are in too much of a hurry sometimes.
The Water Board works pretty well in achieving higher uses than agri-
culture. We have one State Water Board storage dam near Bozeman where
I live. The city has contracted for water out of that storage. In fact, the
city contracted when the project was started some 10 years ago, even
though they didn't know when or if they might need the water. The city just
bonded within the last two months for a million and a half dollars for a
pipeline and settling basins to bring more water from that particular stor-
age because the city has outgrown its water supply. In some instances it
may be necessary for a local organization to have a bonding and taxing
power in order to do the job adequately. It was found early in western de-
velopment, at least, that development didn't go very far without the bonding
and taxing power. The first Irrigation District Act was passed by Utah, but
it didn't have the bonding power. It was repealed and another passed.
I suggest that every constitution is subject to change. That goes all the
way from the Federal Constitution down to some local club. Usually, if one
finds a club with a constitution that hasn't been amended, it is because they
haven't met since the meeting at which they adopted the constitution!
It means that fundamental documents have to be changed as the demands
indicate desirable. Whether or not any state could go to the extent suggested







LEGISLATIVE ALTERNATIVES


by Professor Wollman yesterday, is certainly highly doubtful in terms of
throwing out the existing pattern of control and the state taking over owner-
ship, control and distribution of water. That isn't to say there might not be
some cases where such a procedure might be the desirable solution. But
we have to fit these things in with what is possible.
One of the books we read quite frequently in our Western country is by
Walter Prescott Webb, "The Great Plains." He argues that the Federal
Government made the biggest mistake in history when it didn't retain title
to all the water at the same time it retained title to federal lands. If it had
happened at that time, we might accept it just as naturally as we accept
our present system.
Personally, I am a strong believer in a middle-ground approach to most
problems. I think that is where we find the answers to most of them. I
don't think we find them very often on the extreme, regardless of which
extreme it is. That is one reason I thought I would outline the experience
of the Montana Water Board, not because it is a perfect or ideal situation,
although it is studied by a great many other states. I mention it as an in-
termediate sort of thing in which you have a state institutional arrangement
that seems to be working and getting water resources developed and de-
livering the water and solving certain problems at the state level.
The fact that the Montana Water Board does use a water-sales contract
indicates somebody has to make some determinations of price. Some
things are not given to pricing in the market place. When our legislative
groups make decisions or pass those decisions on to other groups, often
with certain restrictions as to how much freedom they have in making
decisions, somebody has to do it, and an operating agency like our State
Water Board has to do it. Other public agencies selling water have to do
it.
If I am right in assuming that in the eastern states you are going to
increase the economic supply of water through storage and transportation
of one kind or another, somebody again is going to have to set some sort
of price on this water. Water doesn't fit the free market system because,
as was indicated here yesterday, it isn't in the same sort of category in
moving as freely as other goods.
I should just mention in that connection that we do have under way a
study in which we are attempting to find out what sort of water use pat-
terns result from different kinds of pricing arrangements.
We have just about everything under the sun in Montana in the way of
pricing systems. We are taking all of those pricing systems as they ap-
ply to agricultural use and trying to get information on the amount of water
used as a reflection of the difference in pricing arrangement. We have
such arrangements as a set price for a certain amount of water, a set
price for a basic amount of water, plus an excess charge for water over
the base. We have within that, we find, a situation where the excess charge


r






LAW OF WATER ALLOCATION


is less than the base charge, where it is equal to the base charge, and
greater than the base charge. We have this occurring under situations of
limited water supply and unlimited water supply. Out of it we hope will
come something that may be useful in administering pricing.
I agree with what Professor Haar said yesterday to the effect that the
West has no monopoly on the evolutionary process that is going on in the
appropriation doctrine. You may be able to apply parts of it to the riparian
doctrine, or modifications of it. If I didn't think that, I wouldn't have out-
lined some of the things I did.
Just one more area of comment. This is prompted by some of the things
that were said last night, which might be best summarized by saying we
should make haste slowly. I would add that some people think that the water
problem is a bad dream and they will wake up some morning and it will be
gone. I don't think that is likely to happen.
When I talk water problems in the West, I always start off by sum-
marizing population growth and per capital use of water. Then I add one
more thing. All my data from the population experts indicates another
population explosion in 1965 or thereabouts, which means simply that all
these young people who are already with us and who are creating a school
problem now, are going to get married and raise a family. I always tell
people if I could go into the diaper business wholesale about that time, I
would be all right. How slowly you can make haste is the real question.
I would add only that, if it is a matter of delaying action or hoping that no
action will be necessary in order to preserve certain values that you hold
now, including individual freedom of action, that too much delay may re-
quire the kind of action at a later date that results in even more restriction
and even less individual freedom of action in the long run.
CHAIRMAN BEUSCHER: Thank you very much. I wonder if Mr. Trelease
would add some words of wisdom about the appropriation system, which
seems to me to grow more and more complicated, to a fellow like myself
who is completely ignorant of it except what has been told me about it.
Among other things, it develops that the prior appropriator may be a state
water board that gets prior right to tremendous amounts of water and then
proceeds to parcel it out on sales contracts. That, at least, I got.
MR. HUFFMAN: They have to take their turn, priority-wise.
CHAIRMAN BEUSCHER: Once they have gotten their right.
MR. HABER: Do they have condemnation power ?
MR. HUFFMAN: No.
MR. TRELEASE: We have heard a good deal about the problem as to
whether these laws do any good. Mr. Wolman, in a private conversation,
expanded the thought, "Look at California," he said. "I think you will
agree that California has the worst messed-up water law imaginable." I
said, "I agree." He said, "Look at the State of CaLifornia and the amount
of development it has. Perhaps water law doesn't have much effect upon






LEGISLATIVE ALTERNATIVES


water use." He didn't convince me, but Mr. Huffman almost has. I was
doing a little legal research in legal history and found that the first Mon-
tana water case was a case involving a man being tried for murder. He
shot another man for stealing his-water, but the judge said that wasn't a
defense for homicide.
I think there was a tendency in the early part of this discussion to as-
sume the very best about the law of riparian rights, and, I thought, the very
worst about the law of prior appropriation. I would like to start off with the
thought that perhaps we should look for the best, not the worst, in appropri-
ation. A great deal has been said here about the flexibility of the riparian
doctrine, the ability of the courts to move with the times, to make social
adjustments, to balance the equities.
It sounds so nice I almost forgot the California cases in which the ri-
parian doctrine was applied in an area of water shortage. There is a
great deal of talk about compensation and the marketing operation, laissez-
faire under riparian law. I am not sure that that is exactly right, because
many of the cases that I have read on western riparian law have been some-
thing like this: A person has a use for water for which he has made a very
considerable investment. Since it is a non-riparian use, it is enjoined and
his investment is lost. At first this was done at the free will of the down-
stream riparians who insisted on the natural flow. Later, it had to be
shown that the riparian wanted to make a later reasonable use of it, up-
stream or downstream. A riparian is not in too much better position, be-
cause there are quite a few cases of a riparian who has made a reasonable
use when there were few demands for water, and then that use or a large
part of it is taken away, because other users now want to make reasonable
lawful uses. That uncompensated loss of investment, it has always seemed
to me, was a defect in the riparian law and one which has been slid over
in the talks here.
The Chairman asked me if I would expand a little bit on my remarks
about the ability of appropriation law to expand and be flexible. I think a
good deal has been said about that. I would like to look at it from the legal
side, not necessarily what has been done on it, but to point out that the law
itself is capable of change. It was a western common law, originating in
the traditional way we think of the common law of England originating, from
the customs of the people.
It was, I think, eminently suitable for a pioneer economy, and the pio-
neers acted that way. The first miner to take water from a living stream
over to a former bed of that stream, the bed that in geologic ages had
been the location of the stream when the gold was laid down, took it, and
he would shoot anyone that tried to take it above him. I think you will re-
member the lawlessness of the California gold camps, as Bret Harte has
written them up.
As the miners became more orderly people, as more and more of






LAW OF WATER ALLOCATION


them came, and I think we should remember that they were mostly Amer-
icans who would come from the East and what we call today the Middle
West they got tired of shooting each other and being shot, and they
formed mining districts. These districts were pretty much autonomous,
and made regulations. These regulations first laid down the rule of prior
appropriation, that the fellow who first located a gold claim got the better
right to it, that he who first took water to his gold claim got the better
right to it.
There is some doubt in my mind as to whether or not we can make an
absolute transfer from that beginning to the agricultural picture, because
I am not sure that the agriculturist really picked up the customs of the
miners. I think it went something like this: The first man who came into
a valley and pulled up his oxen said, "I think it looks nice here," and "I
think I would like to build my house over in that shady grove over there,"
and he staked his homestead, and then he dug his ditch and scraped the
sage brush off and plowed his land and planted his crops. Then the next
man to come into the valley had to take a second choice of location. He
had to take the second water right.
I think there may have been two origins of prior appropriation, one in
the mining fields, and one, less publicized, by the homesteaders. But greed
and ignorance and inefficient methods developed in the system, and the law
was changed, by statute, it is true, into the so-called Wyoming system of
state regulation of water rights, (a system evolved by an engineer, Elwood
Mead) and I think it has kept pace with developments. [There are now]
water exchanges, such as Dr. Huffman mentioned, and water importations
are recognized. The old rule that a person is entitled to the stream condi-
tions as they were when he initiated his appropriation, has dwindled away to
a rule that an appropriator is entitled to water but a junior appropriator
may substitute any other water for it, may bring water from another source,
another ditch, may dry the stream up as long as he makes some provision,
as long as the prior appropriator does get his water.
The institutional developments that Dr. Huffman has told us about, the
water users' associations, the mutual water company, the irrigation
district, and today the conservancy districts, have been growths of institu-
tions that have fitted in with that water law.
As I said, Wyoming initiated a system of state control. Does that mean
there was no laissez-faire and freedom in the market? I think there still
was, with a minimum of regulation.
The project which looked most attractive, most feasible, which could
attract capital to it was first built. That is, it seems to me, laissez-faire in
action. Does the state control it? Yes, but rather curiously, most ap-
propriations for municipal water, for irrigation, for power, for mining,
happen to coincide with the development of the state, and therefore they were
in the public interest, and that is why Mr. Fisher finds so few cases in which






LEGISLATIVE ALTERNATIVES


appropriations have been denied on public interest grounds. Most of them
so far have been, it has been believedby the administrators, in the public
interest of the state at the time the appropriation was made.
Dr. Wantrup went into, I think, the greater opportunities for laissez-
faire and the transfer of water rights. Here again I ask you to look at the
best in western water law. If you can draw any lessons for the East, if you
can use any part of it, use what you can. Don't adopt Arizona's law that
says you absolutely can't change an irrigation use to any other use, or to
any other place unless the land becomes completely unusable because of
seepage. You wouldn't want that piece of law. But don't put the baby out
with the bath, because there might be other portions of the Arizona law
which might have a real advantage for you.
I would like to mention a new change which is coming about. It was
really foreshadowed a long time ago, when in 1890 the first Wyoming
State Legislature gave the Engineer the power to deny any appropriation
where there was no unappropriated water in the source. That was first
misinterpreted because they thought of low summer flows. At a later
time it was practically thrown away. Anyone who filed an application for
permit was granted the permit, and the permit became a sort of hunting
license. If you could find the water, why, then the State would say, "It is
all right for you to use it." There are many so-called flood water rights
as a result, rights so junior that only in times of extreme high water can
they ever be used.
I could cite you the case of the Laramie River which flows past my door.
I will simply say that if you made a study of the Laramie River Basin, and
said this is based on prior appropriation law, I assure you that you would
probably flee that law. You would say that you wanted no part of it, if you
could look at the history of that Basin. Our lawmakers and judges can see
that, also. We are trying to revitalize that idea of granting appropriations
only where there is water for the project.
Mr. Harris of New Mexico gave us one example of that in the Lea Basin,
where an attempt is made to divide the water up so there will be enough
for all. There are other examples of that. The districts that Mr. Huffman
mentioned frequently operate this way: The district either gets a prime
water right and the actual irrigator gets only a share in it, or a group of
irrigators who organize a district will assign to that district their water
rights, so that the district becomes finally the owner of all the water rights,
and it has a sort of single lump right then and the individuals get an equal
shpe of it.
e are trying to do that now. For instance, we are trying in the West
oow to develop supplemental irrigation. We know that the unrestricted use
of the doctrine of prior appropriation has led us into trouble. We have
these junior rights which are unsecure because of what Dr. Wantrup calls
the physical insecurity. There is not enough water for those junior rig:.Ls,






LAW OF WATER ALLOCATION


and practically none for the flood water rights. The answer is by new in-
stitutions and new development hng in nntae wat-o .Stnme.tines
we can do ite t so
that jitfloishro uhout th -uea d -Utod backI water) so thatt-may
be delivered in the periods when it is n 1eoasd 0normtnP' v' i "vipnirted
into basins. The law of prior apropriation with the irrigation district ad-
deci on to ~iTai T e pnei gin drige nlopment is ~ radually anoroach-
ing then a system of equalightsn common supply.
Now, yoare going to say, "It is gradually approaching riparianism." No,
I did say that, because these r fiPs right a firm S where the
rinariean riorht is .nunxed right. There is always the danger that the equal
rigihtjwi.le.Qme less anddlessland-4BiiS9m ei6 e~-l c o titT-erwe
picture until finally there is not.enoughfQrall. I say that the market and the
laissez-irsystem does not work too well in that situation, if I understand
my economics.
I think that is where the lawfp~iOapi iati mving to. Maybe
you want in the East tom mgye towad hat^ sJM rhn s- methnd that you
E55ii s7eso-called r osals that f
discussion here. I think it should be noted that this substitution of appro-
priation for a system of riparian rights is a proven system. The substi-
tution has been successfully made in Nebraska at the turn of the century,
by Oregon in 1909, by Kansas in 1945.
There has been a great deal of talk about the confiscation, the destruc-
tion of unused riparian rights that would result from adoption of these
proposals. I don't think these proposals really propose such a destruction
or confiscation. The unused riparian right is not destroyed. F,=thlamst
part, we find you still have water excesses here.The ripai' n
proprietor He now exercises his right in a certain manner,
and e is given a time limit within which to exercise it. (not the fixed time
limit Mr. Nelson told us about of two years to vest his right; he has an ad-
ditional time). How long is it? He my j ercle hii by ap-
propriating until the time comes when by so using the water he will ep ive
another per f an invetment euse prior use. t.Mt n in
the East might be quite a ,gjme. anot quite sure, there tha the
talk-about destructionaf nusedrights iscorrect.
If appropriation is moving toward a system of fixed rights in a known
supply, I think maybe riparianism, too, is moving in that direction You may
not want to travel te same road. Maybe the district idea is better. Maybe
a district for the P P within thframework of riparianld
see a district in which erhans a majority might assgn all riarian rights
Stthis district organization and perhaps we might thereby freeze out a
small dissenting minity, just as we insist that adisse g ori
included in such districts as you are familiar with, the paving district, the
sewer district, that you are members of willy-nilly, you have no choice.


__






LEGISLATIVE ALTERNATIVES


That very well might do it. Then you might have an organization with
taxing and bonding power- equateoth o o e that winter storage
of e Paw aw and useitwen it s needed in the summer months May-
be tt is e eastern soluton, and a study might very well bemade-then
not necessarilurther tu appropriation law it f arnpriation
institution, he instutius Ali_ .tnaveben rnpr In thz Wznt to ienl-
their profiems... [the institutions] ... mi [in the
Eas!, nabh... rdr,ln aw. I would just like to leave you with
that though tor furter study.
-CNAr VAN BEUJSCHE: TThank you very much. I wonder if we have
comments or questions ?
MR. THOMAS: I would like to mention one item about agricultural use
that might fit in with what Professor Trelease has said.
As some of you may know, the first use of irrigation was by Mormon
pioneers before the discovery of gold in California. In that development
you wouldn't get much history of disputes. Primarily, they were a re-
ligious group that came in. They were anxious to have additions come in.
To the extent possible, there was group collective action and helpfulness.
There were [some] disputes [of course], which went to ecclesiastical
courts, before Utah became a state. That is one thing I think that has been
very important in making the appropriation system work. The idea of ir-
rigation districts seems to have come after that doctrine. Actually, the
irrigation districts were preceded by church organizations, communities;
in other words, to the extent possible, water was stretched or might be
replaced to work to the advantage of the newcomer, still recognizing that
the oldcomer couldn't be pushed out.
I would like to take a minute to mention a particular river, the Provo
River, to show how flexibility has developed in large part without legal
notice, but also to a good extent by actual recognition. The Provo rises
in the mountains and comes into Utah Lake. It has a series of appropria-
tive rights.which have been recognized in a decree of court dating from
1921 by classes rather than individuals, but still they are all in very good
order.
In the 1921 decree they recognized several hydrologic factors. They
could irrigate in the mountain regions what might be called waste. That
would increase the late-season flow down to the plains to the west of the
mountains. That was recognized. There was a case where [irrigating]
what might have been termed waste, [produced] a gradual seepage which
brought up the August and September flow and benefited another part of
the area.
Another recognition was that the oldest rights, which were closest to
the stream, could very well get water that was what we call return flow
from some of the higher canals that were really developed separately,
subsequently, and were [under] junior rights. To the extent possible, those


I






LAW OF WATER ALLOCATION


oldest rights really get waste water from junior rights, and that is recog-
nized in the decree. It is going to happen, anyhow, hydrologically. If they
had their full initial rights, plus the waste water from the higher canals,
they would be flooded out.
Then, in time, reservoir storage has been put on the river. But it has
not been by the river water users, which include not only irrigation but
municipal interests. The Bureau of Reclamation has put the Deer Creek
Reservoir on the stream. It imports water from another stream. One of
the requirements is that the natural flow in the Provo will continue undis-
turbed to satisfy the [1921] decree's rights.
This reservoir that comes in on top, then, is just a floating reservoir.
It is working under contractual arrangements. Some of the people who are
Provo River water users also have contracts which the Bureau of Reclama-
tion supplies. Some of that supply goes to Salt Lake City.
In those contracts I don't think there was a question at all as to which
use to serve. The Bureau was anxious to sell shares because there is a
repayment involved in that dam. Salt Lake City purchased about half of
the shares. The Salt Lake City Metropolitan District is essentially only
the City. The County at that time had a group of farmers with an adequate
water supply who were not interested; now the County is a group of suburb-
anites who are interested in water. That is working out to advantage be-
cause there is the water to be sold. These new users who were not [about]
at that time the dam was built are getting their water. Of course, they are
paying to the City, and that is going to the Bureau. There are contractual
arrangements.
I think basically the requirements in the system of appropriation are
that you have an assurance of water. They have tried to get an assurance
of water. It is only when they don't have that assurance of water that they
want the assurance of a water right. Then you get into trouble. But to the
extent possible, the development has proceeded and your appropriation
system, as opposed to legal cases, has gone along with it and grown with it
and shows flexibility to adjust to it.
CHAIRMAN BEUSCHER: There is a factor that hasn't been mentioned,
just shifting the scene to the eastern states for a minute, in connection with
riparian doctrine. I am pretty sure this isn't a major thing. But I grew up
in a county which decided that the banks of the few streams in the county
ought to be converted into public parks. And now that planning has been ac-
complished over a period of about 35 years, and most of the land along the
streams is in public parks. Industry is back from the stream a considerable
distance. Big industry is pulling water out of the ground, and you have, in
some places there, at least, a pretty serious problem as the water table goes
down.
It is possible that if we had a little looser system of law under which in-
dustry could have gotten some of the water out of the stream, and some out






LEGISLATIVE ALTERNATIVES


of the ground, that the balance would have been preserved in a better way.
At any event, this idea that you may want a substantial area along your
rivers used for public recreational purposes is something that I think
ought to be mentioned. I am speaking of Wisconsin, Milwaukee County.






DISCUSSION: Legislative alternatives:
c) Special districts and storage of water under riparian
law.


MR. MALONEY: I would like to say one word about the district approach.
I have to agree with Mr. Trelease that this may well be the solution to the
problem, but I don't like to see it labeled an appropriation institution be-
cause of the fact that we have thousands of water districts in a state like
Florida which started off mainly as drainage districts, because our pri-
mary problem was one of disposal. They have been switching to more ir-
rigation districts. Iowa has, and they are not necessarily an appropriation
institution.
MR. HUFFMAN: It is an example that can be applied. But the idea of
conservancy districts in the East has been as a disposal device. That is
true even in New England, where it is used for flood control and sewage
disposal. It is only recently that it has been used as a device for supply-
ing and delivering water.
MR. MALONEY. When they are used that way, they are dividing up the
supply, but by custom rather than case law. That is happening in Florida,
and we have no cases adjudicating what they can do within the district. But
they have taxing power, in-fact, they do divide the supply among the people
taxed. Generally there they do not use the natural streams. They do it by
way of irrigation canals. The law is not quite as well settled as to what
you can do there, and they simply divide up the water.
MR. TRELEASE: I didn't mean they were an appropriation institution.
It might well fit into a riparian system. One other thought on that: legis-
lation to clarify case law might add some assurance that the storage of
water for later use was a proper riparian use, because that was an un-
settled question in western riparian law. The California court said you
could not do that. If that approach is taken, perhaps that might be com-
bined, that particular clarification.
MR. HUFFMAN: I wonder if you need clarification on freedom for
transporting water as well as storing ? I don't know.






LAW OF WATER ALLOCATION


MR. TRELEASE: I presume you mean by that the western system of
private eminent domain powers for ditch rights. That might well be.
MR. MALONEY: We have had that in Florida since the passage of our
Constitution. There have been rights that were put into our first Constitu-
tion which provided for drainage of one man's land across another for
private appropriation.
CHAIRMAN BEUSCHER: Are there other comments?
MR. FISHER: The other day Mr. Daniel asked about these bills, statutes
to facilitate storage. Maybe Harold Ellis may know more about the Kentucky,
Indiana statutes and what is being considered in other states to supplement
the riparian case law in some way by trying to encourage, facilitate storage
of water.
MR. ELLIS: I would visualize this type of thing as being an important ad-
justment that might be made in eastern water law, to the extent that it is
not clear that storage, during seasons of high flow for later use during
seasons of low flow, can be done with a reasonable degree of freedom from
possible liability, which may be the case in several of the eastern states.
The Kentucky, Virginia and Indiana statutes on this subject* each take a
somewhat different line. The Kentucky statute simply declares that this
may be done, within limitations, presumably as a rule of law. The Indiana
statute ties to this the requirement that a permit be obtained from a state
agency before going ahead. The Virginia statute provides for obtaining the
permission of a local court. It doesn't expressly state that before one goes
ahead he necessarily has to go into the local court, but if he wants to obtain
more assurance he may step into a local court and have a hearing, at which
other interested riparian owners may appear, and may get permission from
the local court to go ahead.
All three statutes apparently would limit the use of the stored water,
however, to riparian land. There may be a question as to whether other
states would want to impose such a limitation, since we are dealing here
with water that is stored up in periods of high flow when normally no one
would be damaged. I think a good argument often could be made for saying,
why not also make this water available, perhaps with limitations, for use on
non-riparian land.
Another important consideration in connection with the Virginia statute
is the definition of riparian land. I think we may need to pay particular at-
tention to this, if the decision is made that a state will stay with some ele-
ment of the riparian doctrine, at least for the time being.
Riparian land is defined for the purposes of the Virginia statute (I doubt
whether it would apply to all riparian use in the state) as land lying within
the watershed of the stream, but all land under one common ownership
which touches the stream would be riparian land even though it had been

Ky. Rev. Stat. 262.670-.690 (1955); Ind. Ann. Stat. 27-1401 to 27-1405
(Burns Supp. 1955); Va Code Ann. i 62-94.1 through 62-94.12.






LEGISLATIVE ALTERNATIVES


bought in separate tracts. It is not entirely clear from the wording of the
statute, but there is a possibility that this means not only land in such
condition at the time of the enactment of the bill but that in future the
amount of riparian land could be expanded as, for instance, by a non-ri-
parian owner's buying up riparian land, attaching it to his land, and mak-
ing the whole tract riparian land for this purpose. If this is possible, a
good deal of the land in the watershed of a stream conceivably might even-
tually become riparian land for this purpose.
Is Mr. Daniel here ?
[There was a cry of, "He has gone."]
MR: ELLIS: He certainly would have something that he could add about
the Virginia bill. They did, I understand, get into a bit of a problem over
the fact that a stream was defined in the Virginia statute so as to lead to
the possibility that almost any natural channel which has water flowing in
it only a few weeks out of the year might possibly be construed as a stream.
This caused concern because some thought that farmers who might want to
build farm ponds by putting a dam across an essentially dry draw possibly
might have to go to a local court and get permission to go ahead. They are
no longer so concerned because the Virginia Attorney General has inter-
preted the statute to mean that it is not mandatory, and that therefore
farmers would not necessarily have to obtain a permit.
CHAIRMAN BEUSCHER: What does this Virginia bill say about trans-
portation of water ? I am thinking about municipal water supply and the
fact that a municipality might own a piece of land bordering on the storage
facility. Could it pump a dozen miles away?
MR. ELLIS: I do not believe that it generally could do so. The statute
apparently limits the use to riparian land. If the definition of riparian land
permits its expansion so as to possibly eventually include much of the
watershed, as indicated earlier, it might be that a municipality could obtain
the right to do it.
A related provision that is very important in the East, in addition to the
question of putting a dam across a stream, is the channeling or pumping of
water into an offstream pond during seasons of high flow. The Virginia
statute says nothing about that, as I recall it. But the Kentucky and Indiana
statutes do provide for this. Again, I would say there is some question in a
number of eastern states as to whether or under what circumstances this
can be legally done under the common law. Of course, if no one is actually
damaged by such use, there are not apt to be many lawsuits arising over it.
Legislation in this regard may help to make such rights more certain than
they are now.
I should add that the Indiana and Kentucky statutes do not purport to per-
mit interference with other existing reasonable uses of the stream at the
time of the impoundment. While the Virginia statute is none too clear about
it, the Attorney General has interpreted it to mean that, once permission
has been obtained from the local court, others may not prevent the permit-


L







LAW OF WATER ALLOCATION


tee from doing the authorized acts. At any rate, the Court is directed not
to grant a permit if other riparian owners will be injured. Furthermore,
the Virginia and Indiana statutes provide only for the impoundment of
waters in excess of "normal" or "average" stream flow, respectively. All
three statutes require that release mechanisms be included in any dam
erected thereunder.
In one or more of these states there are certain additional laws relating
to dams, at least to dams for particular purposes or on certain types of
streams, which may need to be complied with. With respect to navigable
streams, certain federal laws and regulations also may have to be complied
with.





DISCUSSION: Importance of water rights legislation for solving water
allocation problems; the role of a water allocation and
development plan. Basic information.


MR. HABER: I think we have to distinguish between certain problems
and situations which I think have been very confusing throughout the
country. People have asked the question: Will legislation product water ?
The answer obviously is that legislation in itself can produce it if it is
development legislation, appropriation of money for the development of
water, and that is part of water law.
If you are talking about water allocation legislation, it obviously pro-
duces water for certain people at certain times. The whole question of
development and allocation is an interrelated question, because if you have
certain types of uses along a stream, and let's say a municipality needs
an additional water supply, then there may be two alternatives in certain
circumstances. It may be possible to say that certain users along the
stream should be cut down or cut out and we should use the water that we
have, or it may be possible to say that we should develop additional water
in order to satisfy the new municipal needs. Those are two alternatives.
If you take this away from the static situation of a particular time and
project it into the future, then these alternatives are future alternatives,
namely, we should not allow certain uses to develop along this stream, be-
cause we anticipate certain other needs, such as additional municipal sup-
ply needs; or, we should in our future plans say that we should let these
uses develop along the stream, since in the future we will want to take care
of the additional municipal-supply needs by developing more water.
Sometimes these alternatives are not even possible because in certain
areas development may be a completely impractical alternative. The cost







LEGISLATIVE ALTERNATIVES


may be so prohibitive that right at first glance you can see that it is not
a practical alternative. In other instances the cost of development may
seem feasible, but whether you choose that particular alternative or
choose the alternative of a different pattern of allocation will depend on
the relative cost. You must compare the relative cost of developing more
water in relation to the total productivity that you are going to achieve
with the cost of leaving the water supply as it is and the total productivity
that you are going to achieve when you cut certain uses out.
Into this picture you also bring the possibility that certain users might
be able to go to other sources of supply, but they will go to other sources
of supply only if you anticipate these alternatives. If you tell them that
they cannot use this water, they may go somewhere else to other sources.
If you don't say anything, if you do not have any kind of regulation, they
will start using this water along the stream, and a certain pattern will be
established, and then later on when additional needs are developed, the only
alternative might be additional development or buying out the investments
of these particular users who have established a use pattern along the
stream. That again becomes an alternative cost question. Do we want
these use patterns to be established on streams even at the risk of having
to buy out their investment when future needs develop ? The cost picture
will change then.
Before, we were talking about the alternative cost of development versus
the alternative cost of leaving the supply as it is, with the alternative pro-
ductivity of one pattern of allocation against another. Once you have a cer-
tain pattern established, then you get the question of alternative cost of de-
velopment as against alternative cost of buying out the investment of other
users.
There are human factors that are involved, too, that cannot be always
described in terms of money. When a farmer settles in a community and
becomes dependent on irrigation-well, we were talking yesterday about
the situation in New Mexico, in the real arid West, where you may have to
relocate farmers. Relocation is, I imagine, a distasteful thing to most
farmers, even though they get paid for it. I don't think they like it. I think
it is a human cost that we cannot easily measure in money terms.
From all these points of view, the question arises to my mind as to
what extent, what degree you can anticipate water use patterns and antici-
pate these relative costs of development and different allocation patterns,
relative productivity, and regulate therefore the use pattern somewhat
ahead of time.
My point of view therefore is that if it is feasible to do that-and there
we need the help of economists, but it is not completely an economic ques-
tion-I think the people who have said, "Well, who is going to say what is
the optimum benefit," or "What is the optimum use," do have a point. I
don't think economists can always mathematically determine what the opti-
mum use is. I think what they can do is supply us with alternative patterns,


I






LAW OF WATER ALLOCATION


where they will use their imagination and instruct us, give us some insight
on the consequences of alternative patterns. But the ultimate question of
what is the best pattern is a matter of democratic choice. It is a question
of what the people want. So that when you are talking about optimum use
pattern, we are not talking about a mathematical formula. We are talking
about an intelligent choice.
We cannot make an intelligent choice unless there are some people
around, and you will admit that those farmers or most ordinary citizens
are not going to figure it out for themselves, that some people must be
around who will present us with alternatives and with their consequences
so that people can make a choice.
So that, for water, the same thing ought to take place that takes place
in city planning in order to make it a little better. But it won't be much
more perfect. There will be a group of people who will get together after
long discussion and make up some kind of pattern, alternative pattern;
and then the pressure groups will get to work and the democratic principle
of choosing the better use pattern will get to work in the light of a proposal,
or in the light of alternative proposals.
What we need then, I feel, as far as legislation is concerned, that can do
any good at all, is a planning agency in the water field that develops alterna-
tive use plans after considering possible alternatives. This should be done
no matter what method of administration is later adopted to carry out the
plan. It is possible, I think, to effectuate a water plan through judicial ad-
ministration by means of "stream allocation decrees," which I discussed
yesterday,* and to bring the administrative agencies into the court to make
suggestions to the court as to which alternative use patterns best meet the
requirements of the plan.
I don't think it is the best procedure because it is very cumbersome and
probably very expensive. If the agency itself has the power to grant rights
and permits on the basis of such a use pattern, it would probably be a
simpler procedure for the court to have simply a power of granting, per-
haps, the final decree, so that it may cut into a completely arbitrary ac-
tion of the agency.
Of course, no matter how much the democratic process operates, no
matter how wise the economists are, they are going to make mistakes. We
are living in a very dynamic society. We have noticed that after the Second
World War that that is so, and it may go on for quite some time. We cannot
anticipate all of the developments, not even in a general way, and certainly
we are going to make tremendous mistakes when it comes to specific no-
tions. So there must be built into the system some way of changing the pat-
tern midstream. In other words, investments previously sanctioned will
sometimes be affected. We will have to probably change our mind as to
certain established users and make them get off the stream. But the idea


* See pp. 428-434.







LEGISLATIVE ALTERNATIVES


of planning is to keep that a minimum. When it does occur, there should
be some compensation built into the legislation.
There is the other suggestion that the compensation scheme doesn't
necessarily have to be a full market value scheme. The question was
raised yesterday by some of the economists: What do we really need?
How much guarantee do we really need not to discourage investment?
That has to be found out. We know in other fields, such as in the public
utility field, investment has been encouraged even though the way in which
profits are figured is not in terms of any market value but in terms of
some percentage return on investment. I think a compensation scheme
might be worked out on that kind of basis, and sometimes prove less
costly when you have to make changes and alterations.
The procedure, of course, that is suggested here does not foreclose by
any means the possibility of group organization, districts, or anything of
that sort. Where it is accompanied by enabling legislation that will allow
groups of users to organize group associations, enabling legislation that
will allow state development agencies to dispose of water under contracts,
this scheme can be very well combined with Dr. Wollman's and the kind
of thing suggested by Mr. Huffman, because the state agency and the users'
association would simply come within the general water plan, and their
rights would be subject to the approval of the overall planning agency, and
these group associations would contribute toward compensating displaced
prior users, where necessary. That may be a way to handle it, because
such an agency through charging for contracts would be able to pay for
that much more easily than an individual user might. This is a general
suggestion. I could go on into more detail.
MR. THOMAS: Would you have an alternative for each, say, 10 million-
gallons-a-day of supply? Is that what you mean by "alternative?" As the
supply varies you can come up with a different alternative ?
MR. HABER: Where you have situations of extreme fluctuation? Is that
what you were talking about?
MR. THOMAS: Yes, and in many places we don't know what the supply
is. It would be necessary, then, to draw up one plan for the lower flows and
one for the higher flows.
MR. HABER: This is a factual question, again: To what extent is the lack
of knowledge due to uncertainties that God made; to what extent is the lack
of knowledge due to the lack of data in fact finding ?
MR. THOMAS: Wouldn't it be possible to have alternatives regardless ?
MR: HABER: If the lack of knowledge is due to fact finding, I think one
of the first steps that would have to be undertaken is the fact-finding pro-
cess. But this time it would be geared to the problem of allocation. I think
what Mr. Harris was talking about yesterday, namely, the fact that in cer-
tain areas the aquifer was studied and studied, that they had a problem and
didn't arrive at any answer, probably stemmed from the fact that the
studies were not geared to a particular control scheme. The time, then,





616 LAW OF WATER ALLOCATION

you can put the question that the hydrologist can answer will be when
there is some particular control scheme in mind.
This is another advantage of the idea that I am suggesting, that it will
make these studies much more meaningful. We are getting basin studies
and aquifer studies all over the country. These things are multiplying. We
still don't know to what extent these studies will really answer the crucial
allocation problems when they come up, because we don't have any scheme
of allocation in mind, not even hypothetically. The idea of having a planning
agency try to draw up an alternative water use pattern will also mean they
will have to ask the scientific agencies very specific questions. It will steer
the scientific agencies into very specific fact-finding which is relevant to
the control problem.
MR. MOORE: I would like to amplify and stress the relationship Mr.
Haber brings up here with this matter of basic information. It seems to me
that if our attention is focused in the future to limited areas or broader areas,
as the case may be, in this matter of determining what the maximum poten-
tial supply is, what the present supply is, what the present uses are, what
the future uses may be, based on the present pattern of use and the present
growth development in the area, then...[with these] factors...[in mind we
might well] look and see what the future requirements may or may not be.
[Of course,] I don't think anyone is going to forecast [for instance] what
the population growth will be in Long Island. Who would have guessed that
Long Island would have had the development that it has had, or any other
similar area...[But] if the planning agencies, legislative groups, economists,
the engineers, or whoever is involved, the recreationalists, if they have
some total measure of what the future holds-this is perhaps more partic-
ularly true of the East than of the West-then they can guide their sights in
the direction, as Mr. Haber points out here, of trying to anticipate or trying
to direct the uses in logical patterns, at least as logical as these things can
be.
On the other hand, don't forget that historically where there has been an
agricultural use of water, and when an industrial use is substituted, we
don't change perhaps the quantity of water required. It is put to a different
use. You say that you have displaced the agricultural use by an industrial
use. By and large, those are voluntary changes on the part of the individuals
and not by any directives along the line. The farmer who sells his property
for industrial development, and there is water available, that is part of the
sale. There is no problem with that farmer. You don't buy it from a farmer
who doesn't want to sell. We find that every day in our business. If the
farmer wants to stay there, he stays. No matter what you offer him, he
isn't interested. At least today there are still sufficient alternates along
the line where you can pick up some farmer who is willing to sell.
It doesn't appear that we have any serious conflict along that line with
respect to water supply... As urban developments come in and the farmer
is displaced or irrigation-type uses are displaced, it seems to me you have







LEGISLATIVE ALTERNATIVES


substitution. Certainly the consumption per acre is increased as urban
and municipal type supplies come in. There again, if you know what the
future potential supply amounts to, you can plan...what that requirement
would be and how to go about it on a long-term basis. It seems to me that
our aim, legislative and in many other ways, is to direct our attention...
to the fundamental information about what we are dealing with and what
that amounts to now and in the-future.





DISCUSSION: Alternative legislation short of western appropriation or
water-planning legislation.


MR. MARQUIS: You asked me first to summarize some of the possible
alternatives which had previously been set out in the law review article*
which two of my associates and I prepared.
Perhaps I should start out with the safe caveat which wLs included in
that article, namely, that in suggesting them we were not indicating advo-
cacy of any of them or the thought that any of them would/be any definite
answer. We were at the time merely trying to point out at there were
possible middle-ground solutions and that there was a middle ground that
should be explored.
With that, the alternatives specifically were these: first, and certainly
it was not original with us, it was lifted from the Restatement of Torts, that
the reasonable use, riparian rights doctrine could be carried considerably
further than it has been, namely, that the riparian right should be consid-
ered not positively as a right to take a reasonable quantity of water, but
rather negatively as a right merely to be free from unreasonable inter-
ference by anyone else, with reasonable use of water, either riparian or
non-riparian. The adoption of that, of course, would assume non-riparian
use of water on somewhat the same basis as use by riparian owners. What-
ever right the riparian possessed would be freely severable from his ri-
parian land and transferable. I don't know, incidentally, that that would be
any great change from the law that very possibly prevails in a number of
eastern states.
A second thought that was spelled out was that where a larger quantity
of water might be necessary for use by riparian owners, or where a non-
riparian needed and wanted water for a desirable use and could not other-

Marquis, Freeman, and Heath, "The Movement for New Water Rights Laws
in the Tennessee Valley States", Tenn. Law Review, Vol. 23, No. 7, pp. 797-837.
(April 1955).


I






618 LAW OF WATER ALLOCATION

wise get it, as a second alternative, that there might be explored the pos-
sibility of extending the power of condemnation to permit that private
owner to get the use of the water which he needed. Of course, one runs
up against, as we recognized immediately, the question in many eastern
states: Would condemnation along that line be for a public purpose? I
suspect, however, that given the right legislative findings of fact, taking
into account a number of precedents, the precedent, for example, that
we have in Tennessee that, just as an example, permits any landowner
who hasn't reasonable right of access to his land to go ahead into court
and condemn it, I suspect that might be a quite feasible proposition
from a legal standpoint.
Another alternative that we suggested as a possibility was the adoption
of the California system, which as I understand it, and I am perfectly
willing to be corrected by those who know it better, preserves riparian
rights while at the same time gives appropriation rights on a basis
under which the riparian right is basically the superior right to the ex-
tent that the riparian puts water to beneficial use, but permits permanent
appropriation of water that is permanently surplus to riparian needs, and
permits temporary appropriation of water that is temporarily surplus to
riparian needs. I want to come back to that California system in just a
few minutes.
Then, as a final possibility, we suggested something that we termed
"modified prior appropriation." I am not so sure after listening to some
of this discussion that the use of that word "modified" is quite correct.
Basically, what we suggested was that if it were thought desirable in the
eastern states to go to an appropriative system, one might consider put-
ting these limitations on it: dne, we felt that some of the difficulties that
had crept into the western situation, as we were able to discern them,
simply from looking at the literature, was largely associated with the in-
flexible system of preferences which was written into the law of many
western states, and which, putting agriculture first, made it very difficult
to change at a later time from what might have previously been a higher-
ranking use, socially speaking, to another which was economically more
desirable at the later stage. In that connection, among other things, we
suggested the possibility of looking at the rule in Washington which per-
mits the court in any given case to decide what is socially the use that
ought to be regarded as the higher-ranking use.
We suggested also as another possibility that one might consider per-
mitting some state agency to look at different portions of a particular
state, and to say that in this particular area, watershed, what you will,
it looks as though manufacturing is the thing that ought to develop, and
we ought to preserve the possibility of its development, that over here
that looks less likely and maybe agriculture ought to be preferred. (One
of the things that suggested that to us, incidentally, was an existing law in
North Carolina relating...to pollution, which requires the pollution control






LEGISLATIVE ALTERNATIVES


board in that state to look at the different watersheds in the state on very
much that basis.)
A second point we made was the possibility that instead of appropria-
tive rights being given on a permanent basis, they might well be given on
a temporary basis for a period long enough to permit the appropriator to
amortize his investment, but which would permit at the end of the time
the transfer of the right to somebody else, if it were then found that from
an economic and social point of view somebody else could make a better
use of it.
Finally, we suggested that if a system of, as we called it, modified
prior appropriation was adopted, in order to avoid constitutional prob-
lems, it might well be considered desirable to permit some sort of com-
pensation to the holders of unused riparian rights, in view of the fact that
regardless of what they might get in the future through appropriation, I
think it is very likely that the immediate result of the change would be to
cut down the value of their land. That might be done either through direct
compensation, as we suggested, from the state, which then in turn might
conceivably make itself whole by charging appropriators for the right
that it would grant them, or it might be done as in fact Nebraska and
Kansas apparently have done, by giving the riparian owners some sort of
right for damages against the appropriator.
These, I think, in summary, are what we suggested. Now, Mr. Chairman,
you also indicated to me, I believe, before the recess, that in addition to
outlining these possible alternatives I might be free to make some general
comments. So, if you will, I will take advantage of that and indicate some
thoughts that have passed through my mind during the last day or two, and
particularly this morning.
In the first place, I agree with the last speaker to whom I yielded some
time, that I think perhaps too much may well have been made of this proposi-
tion of riparian rights, on the one hand, appropriation, on the other hand,
never the twain shall meet. I am inclined to think, on the contrary, that the
two may well be moving not toward the same point but [toward] something
in the nature...of a fairly broad middle ground. For example, when Dr.
Wantrup and I had our colloquy yesterday on the proposition of granting
appropriative rights for a limited time rather than permanently, if he
didn't agree with me he at least didn't express shock. Later, when I talked
to him...[about the] system of preferences, he indicated to me that he
thought those might well go out the window.
MR: WANTRUP: In fact, I have suggested that many times.
MR: MARQUIS: I understand that.
This morning we have heard that users of western water are getting
to be satisfied with delivery contracts rather than with something that
is labeled a definite definite right. It may well be, as you suggest,
Professor Trelease, that it is an equal right among a number of persons
in a definite quantum of water. But it seems to me that it is quite a







620 LAW OF WATER ALLOCATION

departure from the "first-come, first-served" proposition that those of us
who have looked at prior appropriation from the books have been led to
believe is a basic tenet of that...[system]. It represents, it seems to me,
change. It is in the direction of correlative and equal rights in something,
rather than "first-come, first-served," prior appropriator [first], senior
appropriator here, and so on.
Again, I think that when you get to the point, as both Professor Trelease
and Professor Huffman did this morning, in suggesting that...[the develop-
ment of new water] rather than mere allocation of what water is available,
is highly important, you again get toward something that has proceeded
both in the western and in the eastern sections of the country, and rep-
resents, as Professor Maloney pointed out, something in which both of us
have long been interested.
I would say that if one is to become a proselyte of the appropriation
faith, so to speak, one is adopting a creed that is undergoing some change
and in the direction, perhaps, of the middle ground that I was talking about.
If that is correct, I think it becomes then a question for the East: Is it
easier to reach that middle ground by adopting something that is new and
foreign to our institutions, or do you reach it more easily by taking what
we have and what we know and building on it in somewhat the same general
direction.
Finally, just one other thought that has run through my mind, and that
is, that, whatever legal theories may be adopted have, necessarily, consid-
erable limitations. Let me illustrate that by two examples. One is this
California situation that Professor Trelease mentions. I may say that I
have been in a number of these meetings. I have talked with and listened
to individuals from a number of prior appropriation states. They very
naturally look with doubt on the question of riparian rights. But it has
been my experience that they look with even more doubt, if not antipathy,
on the system of law that prevails in California. I have not, unfortunately,
had the privilege of hearing any lawyer or engineer from California who
could answer some of the questions that that raised for me. As was pointed
out here earlier this morning, I don't know what kind of a mess California
law may be, but I do know, as we all do, that the population of California is
several times that of any other three or four of the western states, that in
terms not only of population but of economic wealth, of income and water
development, its progress has been phenomenal, if not the fastest of any
state in the country. How does one explain it? Well, if the legal rules do
leave much to be desired, they apparently haven't interfered too greatly
with results.
A second point along that same line I think was made very nicely by
Mr. Maddock last night. That was this question of priority versus "high-
ority." Regardless of what your laws may be, it seems to me, after
listening to what has been said the last few days, that prior appropriation,
riparian rights, for that matter, is not a situation where you simply give a






LEGISLATIVE ALTERNATIVES


right to a definite quantum of water and each appropriator gets it accord-
ing to a fixed priority. It seems to me that is somewhat more theoretical
than I have previously imagined. I doubt if a water master or a ditch rider
can go out and simply, by the use of slide rule, omniscience, or what-not,
close those head gates in a way which brings about just those mathemati-
cally perfect results. I suspect there is a good deal of accommodation
among the people who may be concerned. We are going to have that here
in the East necessarily under whatever system.
Just one illustration-and our problem in this respect may be even more
difficult than in the West. Take this matter of irrigation. In the West, it is
ditch- or canal-type irrigation. Whether mathematically or not, the water
master, presumably, does control the head gates. Here in the East, or at
least in the Southeast, what we have is sprinkler-type irrigation, and you
can visualize situations along a small stream where a large number of in-
dividual farmers, by simply extending their pipe into the stream, can
sprinkle to their heart's content simply by flicking a switch on their pump.
Or, Mr. Nelson pointed out to me, they can even connect the system up
with their tractors, and they can do it at nine a.m. or two p.m.
Assume they are granted definite water rights in terms of quantity. How
do you enforce it? Are you really going to be able through, not a ditch
rider, but a pump [timer ?] to control use of that pump or the use of that
tractor and say that this man shall not take any more than X cubic feet of
water or Y acre-feet, whatever the measure may be, or that this man
shall get no water until the senior appropriator has gotten his first? I
have my doubts.
I think that actually what you will get, under whatever system of law, is
a pattern under which, as was said last night, people take the water until
their use gets so unreasonable that their neighbors complain and maybe
go into court. I think the situation will be one of reasonable accommoda-
tion whatever the laws may provide. Those are some random thoughts,
Mr. Chairman.
CHAIRMAN BEUSCHER: I have an answer to your question, I think, Mr.
Marquis, as to what you do, in order to make sure that the farmer doesn't
pump more than he is supposed to pump... [It] is to organize a real active Isaac
Walton League in the vicinity I At least, that is the way it works at home.
MR. TRELEASE: Or you can borrow from the West: use the Montana
system and just shoot him I
MR. MARQUIS: We have a tradition, at least in Tennessee, as I indi-
cated earlier, that conceivably might lend itself to that.
MR. WANTRUP: I have just one short remark with regard to the Cal-
ifornia "mess," which has been mentioned several times: Is it really a
paradox that in terms of economics the law in California works well, and
in terms of the law, of which I am not a judge, it is a 'mess ?" Isn't it
one proof of the point I made yesterday, that the law in California has
adapted itself to economic needs ?







LAW OF WATER ALLOCATION


MR. MARQUIS: I think it must have.
CHAIRMAN BEUSCHER: Not necessarily.
MR. WANTRUP: In the articleS to which you referred, I tried to defend
the correlative-rights doctrine in ground water. I tried to show that at a
certain stage of economic development this "legal mess" has worked eco-
nomically perfectly well. I also tried to explain yesterday why the struggle
between riparianism and appropriation has resulted in California in a work-
able and plastic institutional system.
MR. HABER: I would just like to ride my old horse again, and that is,
that all these general statistics about progress and development and "work-
ing" are relative things. In other words, what we don't know about California
is how much better it would have worked under another system and how
much less the cost might have been.
CHAIRMAN BEUSCHER: It is also just possible, that sometimes a
terribly poor, primitive, crude kind of legal institution actually forces and
induces economic arrangements that are for the best. We have at home the
Common Enemy rule of surplus water. I can't prove what I am going to say;
I don't suppose anybody can disprove it. It means the upper owner can ditch
so as to drain off the flood water (as Mr. Thomas would call it-we call it
surface water to confuse things a little); he can ditch that so long as he
doesn't tap a new watershed-I am talking in terms of an actual case-and
bring the water, in a hard rain storm, down onto his lower neighbor's land
with great force so as to gouge out a ravine seven feet deep, eight feet across
and so as to soak eight or ten acres of his neighbor's land so they can't be
cultivated. It is perfectly all right, says the court.
In turn, the neighbor below can build a dam or dike...and back up all the
water up on the land of the upper owner. That is according to the rules of
the game. What I can see as a lawyer, who has had a little practice, is the
upper owner going to the lower owner and saying that he can let that water
come down, and the lower owner saying to the upper owner that he can
build the dam, and that, "We had better get together and tile this water
away," which is what happened.
MR. BARLOWE: As most of you know, for the last six or seven years,
we in Michigan have been considering the possibility of fitting into one of
these in-between classifications. We have proceeded on the assumption that
reasonable action is desirable. We suggested a legislative proposal* with
the hope that its discussion would lead to legislation that would be reason-
able, that would fit the situation, and that would be far better than the prod-
uct we might get if we were forced into an emergency-type action situation.
So far we haven't made much progress, largely because there hasn't been
any great pressure in the state to force action.
During the six years since we brought forth what was referred to yes-

$ Ciriacy-Wantrup, S. V. Some economic issues in water rights. Journal of
Farm Economics 37: 875-885 (December 1955).
See pp. 1-62.






LEGISLATIVE ALTERNATIVES


terday as the "Michigan Proposal," we have had time for thinking and con-
sideration, We have had numerous meetings with legislative groups; and
this past year we have had a Governor's water study committee. As a re-
sult of these deliberations we have shifted ground somewhat. We are still
in the in-between class; but our thinking has shifted somewhat from that
suggested in the "Michigan proposal."
With this change, we have emphasized two principal things: We want
more security of expectations than the present system provides. This
doesn't mean that anything is necessarily wrong with the riparian doctrine.
But we feel that our courts have spelled out such a small portion of this
doctrine that we don't really know where we stand on a lot of things. Sec-
ondly, with the changing situation being what it is in Michigan, we are not
sure we want to give anybody a permanent appropriation right to surplus
water. We have come up with a proposal that tries to tie these two prin-
ciples together so far as possible.
As a side note, I should mention some of the reasons for our concern
over the need for water-rights legislation. We are very conscious in
Michigan of the impact of increasing urbanization. We know that our na-
tional population has increased 18 million people since the census of 1950
and that continuation of the present rate of increase will give us a popula-
tion of 227 million people in this country in 1975.
Michigan expects to get a little more than its percentage share of this
increase. We have reasonable people in the state who predict that all of
southern Michigan will be one long continuous suburb from Detroit to
Benton Harbor by the year 2000. This isn't entirely impossible. And we
know that it means that a lot of the land which is primarily suited for
agriculture today will probably be better suited to other uses in the future.
This concept of changing uses over time is often described in Land
Economics as the principle of succession in land use. When we get down to
the question of alternatives which Mr. Haber referred to earlier, we must
realize that the land and water use alternatives which are most desirable
today may be quite different then they will be 20 years from now.
We want some built-in flexibility in our Michigan proposal that will
permit changes in water use over time and still permit its optimum or
most desirable use now. We realize that we might want to use our excess
or surplus water today for agriculture but that it might be more desirable
to use it 20 years from now for municipal purposes, for watering lawns or
gardens, or to meet the increasing needs of industry. With population
growth, we know that our recreational needs will call for more water
rather than less.
As we rook at this situation-and knowing a bit about the hydrological
situation in the state-we know we are going to run into a water shortage
in certain months of the year. This creates a real problem for us. We
know that before we are through that we must consider the diversion of
water from Lake Michigan and Lake Huron for use in the state. We know
from past experience that this may involve a bit of controversy with Can-







LAW OF WATER ALLOCATION


ada. So we are going to get into international politics. We also know that
anything we do is bound to create important administrative problems.
The Governor's Water Study Committee this past year has talked
rather generally about a possible approach to the water rights problem.
I would like to outline it for you, because I think it includes many of the
principles Mr. Marquis has mentioned as well as some of the principles
suggested by Mr. Arens and Mr. Fisher in their papers.
We have been thinking in terms of a possible law which would start out
with a declaration of public interest in the use of the water of the state.
We would avoid use of the word "ownership." Instead, we would stress the
public interest in having the waters of the state used in a reasonable and
beneficial way. The proposed law would then go on to include a number of
the features included in the Michigan proposal. Specific recognition would
be given to existing riparian uses. We have given some consideration to the
problem of what we should do with unused riparian water; but no decisions
have yet been reached as to whether we should think in terms of compensa-
tion.
We would specify that our surplus waters-those that are surplus above
the amount necessary to keep a minimum stream flow or minimum lake
level for what we consider desirable riparian uses-should be available for
diversion. But we have concluded that it would be wise to avoid use of the
word "appropriation." Instead of granting straight appropriation rights for
all time, we would give the successful applicants a "license" or "permit"
to use specified quantities of water at particular seasons for some spe-
cified period of years. We haven't decided on any definite number of
years; but for discussion purposes, most of us have talked in terms of a
20-year period.
Any user who secures a permit would then have a right at any time dur-
ing his use period to request the renewal of his permit--say for another 20
years. With this arrangement the permit holder would have an incentive
to enlarge the scale of his operations, install a new pump, or make other
improvements that he could amortize over the period of his extended per-
mit. Whenever a person applies or asks for the renewal of a permit, the
administrative agency would be expected to weigh his request against the
claims and prospects of other applicants. Attention would in this way be
focused on the possibilities of transferring permit rights to better alterna-
tive uses. We realize these alternatives might be much different 20 years
from now than they are at present. We would also provide that permit
rights could be sold with the permission of the state. With this arrange-
ment a desired industry could come into an area and buy out a farmer's
permit rights-or if the farmer refused to sell, it could argue its case
when the farmer's permit is up for renewal. We have also considered
the possible use of a district approach under which this system of water
rights administration would be applied to some areas of the state earlier
than others.






LEGISLATIVE ALTERNATIVES


CHAIRMAN BEUSCHER: A unit of the operation of the state agency
that would administer the program as a whole ?
MR. BARLOWE: Yes. The state administrative agency might decide
to operate in some area such as the Paw Paw valley but postpone opera-
tions in parts of northern Michigan where there is little need for im-
mediate action. We recognize that any state agency would have a real
problem if it started its operations all over the state at once.*





DISCUSSION: Further studies.


CHAIRMAN BEUSCHER: It is pretty evident, it seems to me, from
many of the things said this morning, that a good number of people
present feel that we should have in the water-use field a kind of institu-
tional study in both the West and East, that we have had over in the land-
tenure field, to get down into the institutional arrangements that are
actually being used to get water to the place where it is being used. The
districts in Florida [for instance]-how do they really operate in this
changing situation, where now they are putting water on the land instead
of taking it off?
In my own state [Wisconsin] we are just about to look again at the way
in which our several state agencies that have had to do with the issuance
of permits-where water is to be pumped out of lakes and streams the
way in which they have been operating, the kind of permits they have been
issuing, the transfers that have been made of those permits-[in short,
into] what is really happening. I think much can be learned from this [kind
of investigation] that will help frame for particular states the kind of leg-
islation that best fits local institutions. Then when you have cut the cloth
that way, it may be that it looks like the appropriative man or the riparian
man, ... [or whatever] ... but you may want to start from the institutions
you have and work up.
In terms of this question about studies, Harold, would you have anything
to contribute ? You have made a study in North Carolina of the statutory
law at the State level. You have made a study of the appellate cases in that
State. What more should be done in North Carolina, in your opinion, before
any kind of at least long-range legislation is enacted there?
MR. ELLIS: I would rather consider this question in the light of another

For a discussion of limiting certain State programs to water shortage or
problem areas, see Public Administration Service, Public Water Policy in Tennes-
see, pp. 148-150. Chicago, 1956.


i______________--------







LAW OF WATER ALLOCATION


study that we are doing in Illinois. There we have initiated a study, in co-
operation with the University of Illinois' Agricultural College, which will
cover the laws somewhat the same as I did for North Carolina, although
the publications that result will not necessarily be similar. The first pub-
lication in progress is a summary of Illinois laws relating to water use
designed primarily for farm leaders and workers. (A related study being
made by Law Professor John Cribbet for the State Chamber of Commerce
will center on the water problems of municipalities and industries.)
The first move which has been made to get beyond the legal library
phase of the study has been to send out letters to county circuit court
clerks to find out the kinds of controversies that actually have come into
court, at the lower court level. That will be followed up with personal in-
terviews and investigation of the actual situation in certain cases to learn
what we can about what is going on and how certain kinds of cases have
worked out, particularly where there has been no appeal to a higher
court, which is the usual case.
Then we plan to tie this study with a companion study dealing primarily
with the economic aspects of irrigation, to get a closer look at such things
as where the farm irrigators are located, the different types of situations
they have, including their source of supply, diversion or storage facilities,
and location of their land in relation to the source of water, what their
competing uses are that they are facing in the area, how some of the actual
or potential conflicts or differences have been or might be reconciled with-
in the existing framework of the law, or perhaps under certain alternative
interpretations of or adjustments in the law.
This study is in the beginning stages, and we have quite a way to go.
We are still in the process of formulating the best way to get at some of
this information and integrate economic and legal factors as closely as
we can.
CHAIRMAN BEUSCHER: This assumes, of course, that you have ade-
quate physical data about how much water is available.
MR. ELLIS: That is a distinct problem with any study of this type, as
we are well aware.
Along with this, we are interested in the kinds of contractual arrange-
ments that farmers, in particular, may work out to try to alleviate certain
problems, such as where two or more farmers are irrigating from the
same stream. Some of the problems perhaps may be handled fairly satis-
factorily in that way for the immediate future. It is clear that if and when
irrigation expands to the point where there are say, 20 or more lined up on
a stream, it may be difficult to handle the problems that arise through con-
tractual arrangements. However, working out agreements with the nearest
riparian landowners, particularly other consumptive users, may alleviate
a significant part of the difficulties. It may be that some type of district or
other local organization will provide a way to get around some of the prob-
lems, particularly the problems of a small minority who may not otherwise






FURTHER STUDIES


cooperate. Alternative systems of water law and of organizational, admin-
istrative, and contractual arrangements may provide varying degrees of
certainty and security. In states where the applicable laws permit reason-
able use "under all circumstances," and require proof of some material
damage or loss in order to recover, this sometimes (or even frequently)
may tend to discourage legal action and encourage the working out of con-
tractual arrangements. I think that we are missing the boat if we don't
make some studies of what such possibilities are.
For instance, in Delaware, where two farmers were irrigating from the
same stream and the lower one had a second stream that came in at a
point on his land, they worked out an arrangement whereby the lower user
would take water out of the stream only during a certain period and the up-
per user at another period, during which the lower user would take water
from the tributary stream. Various other rotation arrangements are pos-
sible. Of course, it is much easier to do this where a farmer has some
alternative source that he can turn to.
We have a study initiated in Louisiana in which, among other things,
we may have an opportunity to take a closer look at the irrigation com-
pany and district possibilities, etc. This has been initiated at the request
of and in cooperation with the Agricultural College of the University of
Louisiana.
Among other studies, we have agreed to participate with the Southeast
Land Tenure Research Committee on a regional study of water law prob-
lems. The North Central Land Tenure Committe, with which Mr. Beuscher
is associated, is considering somewhat similar studies. Also, as a follow-
up to my Iowa Law Review article and other research, we need a more
extensive review and comparative analysis of the legislation that we now
have or have tried out in the eastern states. Mr. Beuscher has suggested
that more of this needs to be done in Wisconsin. I don't think that people
generally know enough about some of the permit systems and other legis-
lation that we actually do have in operation in the eastern states. We can
learn a lot from studying what we have and how it is actually working out.
We gradually are gathering information not only on what the enabling legis-
lation is, but also some information on how these laws are actually being
administered, or are otherwise working out, as in the case of North Caro-
lina. Virgil Herrick is obtaining some additional information along this
line about the Minnesota permit system. We plan to include such informa-
tion in a publication dealing with the 31 eastern states, which we hope will
be of value throughout the region.
CHAIRMAN BEUSCHER: Where the area involved is rural country,
where urbanization is popping up all over the landscape-this includes
now a devil of a lot of land in the United States-where that is the situa-
tion, it seems to me that whatever kind of studies you are making with
respect to water-using institutions and legal arrangements, illegal ar-
rangements and formal arrangements, you ought to get on your team the






LAW OF WATER ALLOCATION


professional people who are attempting to plan the use of land in your area.
I think it is perhaps one thing this symposium missed. It seems to me the
land-use planner has a very intimate interest in this problem of water al-
location...
MR. HUFFMAN: On this question, I agree, because I have thought for
several years that there may be a real opportunity to apply some of the
techniques and ideas and concepts of land economics to the water problem,
as we have discussed. And with reference to Mr. Haber's remarks earlier,
we accept them and use city planning or land-use planning, although we
recognize the economist may make errors and will make errors and will
continue to make errors. It seems to me that if we are willing to accept
it in that area-and cities do, apparently, they hire city planning special-
ists-we ought to accept somewhat the same thing in the case of water, be-
cause at least the error won't be any greater, I presume, in projecting the
demands for water, whether it be for domestic consumption, industrial use,
than in projecting and preserving land sites, and things of that sort.
One other comment I would like to make with respect to Mr. Marquis'
question: If you allocate water and divide it up, how do you enforce it?
In the West, I don't think we ever did eliminate the enforcement problem,
except where the supply of water was developed to a point where it took
care of everybody. I am not being facetious. In the early days you had a
real enforcement problem, and you still do in areas of limited supply;
with the result that it was common practice, and still is in some areas,
for example, to have locked head gates for which the water master...is the
only man with the key. In earlier stages than that, the water master car-
ried a gun, because...he [then] was on an equal basis. The tendency has
not been to solve that problem of enforcement; you are dealing with human
nature. It is not much different than sugar rationing with coupons, or any-
thing else. People will get it some place. [The solution lies in developing]
the supply so that you can take care of everybody. I should have said
earlier that about two-thirds of what the Montana Water Board has de-
veloped has been to develop enough water to take care of everybody...
We have ended up, I think, with some indication that what we are
really going to have to find is a middle-ground approach... For the last
seven or eight years I have [participated in discussions] where people
have tried to leave the implication that the public had only two extremes
to choose from in trying to find administrative units for the Missouri
Basin or the Columbia. One was a duplicate of the TVA, on the one hand,
and nothing on the other. That is a sad sort of situation to be in. It is
like giving a man cans of white and black paint and then saying he can
only paint black or white. He can paint ten thousand shades of grey, de-
pending on how he mixes the paint. I think we [could] have many [possible]
solutions [to the problems we have been discussing]. I think we will find
ourselves coming from different directions but coming somewhere near
the middle ground, adopting institutional arrangements, other thing, from







FURTHER STUDIES


either side, to solve a problem, which, after all, is the important thing.
MR. MARQUIS: I am glad to have that statement, with which I am in 100
percent agreement...
MR. HABER: I would like to mention just a few things that have oc-
curred to me as we have been going on...I would like to reiterate the value
of the kind of study that Mr. Ellis and others have mentioned-broadening
it out a little-that we should look into actual district operations and find
out more than simply that there is a district and what the enabling statutes
are; we should find out on what basis the districts do distribute the water,
what kind of contracts they make, what rates they charge, what is the ba-
sis for their determinations and how flexible they are, and so on.
Another thing that has come up here that will be important for those
who want to consider whether they should go ahead and make any radical
changes: How come that, under this terrible law, we have been getting
along for so long and there is no litigation ? I think we should look into
the question as to how water is actually allocated in the eastern states.
What are the actual practices, not only of farmers (as Mr. Ellis has in-
dicated he would study) but of all other water users ? What is the cost of
their getting water, and when has there actually been a discouragement of
development because of the cost and because of legal obstacles? That is a
big order, but I think some of us would like to find that out. It is a very
interesting study that could be made.
MR. MARQUIS: Would you add to that, just to satisfy my curiosity,
California. and how do they do it?
MR. HABER: The other point I would like to make about studies is, as
I indicated before, the possibility of a water allocation plan-how far can
you take it into the future, in what detail, and on what basis would you do
the planning, what unit of planning? I think Mr. Wolman's study is moving
in that direction, the one he is going to make in New Mexico; and I think
perhaps as it goes along we can clarify to what extent the kinds of con-
clusions such a study would provide would be useful to an administrator
who had really to allocate water.
I think there should be a constant back and forth consultation between
Mr. Wollman, or anybody else who understands this kind of study, with
people who have problems of water allocation, to see whether the kind of
conclusions that he is going to reach would be useful to such people if they
ever had to administer such a plan.
I would suggest here, from the point of view of future legislation in those
states where there isn't any immediate emergency but where they antici-
pate future trouble, that one of the things they might do...instead of just
instructing economists to study the situation, (which is what has been going
on, as far as I know, up to now) that they have a law which creates a water
planning commission, the way the city planning commissions were fre-
quently created, without any power whatsoever except to make studies,
and to actually develop a water plan.






LAW OF WATER ALLOCATION


I know there are water-planning commissions in some states. But most-
ly the plans have dealt with pure development plans, where they have not
tried to refine them to the point of particular allocations or where the par-
ticular allocations pattern has simply been assumed. I think setting up the
kind of agency that is authorized to make allocation plans might be a very
good alternative to just general studies. With what it might come up with,
I think we will have a better idea as to the kind of law which will be needed
to implement such water allocation plans.
Just other little legal points which interest me, which I think will come
up under any kind of law that you are likely to get in the future: One is this
question of private condemnation-I think we should have some legal exam-
ination as to how far you can go with private condemnations, and that we
have the material ready as a constitutional question. I think there is a lot
of case law on this, and the analogizing of that case law might be a very
interesting thing to do, and to just have it ready. It might also give us a
clue as to how we should do it. I think, for example, it might also give us a
clue as to how we should do it. I think, for example, it might be much more
difficult to give private individuals or corporations condemnation power,
but much less difficult to give a public corporation in a particular area for
a particular function condemnation power, with a power to transfer water
by sale to private individuals.
CHAIRMAN BEUSCHER: That would be water development rather than
urban development.
MR. HABER: One further thing that follows from what I have said
earlier would be that we might explore more fully, so that we are ready,
because I think many people anticipate this problem coming up: To what
extent is this riparian land limitation really an important limitation in the
East, so that it would be held to give riparians a vested right against non-
riparian users ? I think many of the proposals here have contemplated
non-riparian users, and sometimes without compensation. I think we should
know something more about it and have something ready.
MR. HARRIS: In talking about studies, I would like to make a prognosis
of what sort of studies will have to be made in the West...Certainly more
planning in water allocation will be necessary. For instance, in New Mex-
ico, we have an economic development commission which works closely
with the administrator, and right now there is a good deal of cooperation
on how industry could be brought in, where it could be brought in, and
where water could be allocated to it.
There has been an assumption, I think, that probably in many parts of
the West there is now competition between agriculture and industry. It
appears to me, based on my experience, that that actually is not a very
large conflict. In New Mexico, and I am sure it is true in Wyoming, pos-
sibly less so in Colorado, water is not the main factor in lack of indus-
trialization. If it should appear, I think, that with the tremendous concern
on the part of the public of unindustrialized states like New Mexico, that
public policy should change so that there will be some sort of preferential






FURTHER STUDIES


right for industry (if [industry] cannot afford to buy water at the market
price), it may well be there will have to be some sort of preferential sys-
tem, with possibly a private right of eminent domain.
In our next legislature there will be proposals to extend the powers of
municipalities, because we do have cases now where there is competition
between municipalities and irrigation. We have two cases of which I am
aware of competition between industry and irrigation, and we are talking
[in theoretical terms so far,] about some change in our water-allocation
law to accommodate greater uses of water.
Certainly the whole policy of the law is geared to the proposition that
the water should be subject to the highest possible use. We realize that
may change, that there may be higher uses as far as the public is con-
cerned with water. I am not now aware that there are higher uses that
could use this water that is now being used on the cotton farm.
The big problem that we have in the West is how to better utilize the
available water we now have, not from an economic point of view, but from
a physical point of view, because our main competition now for water is
competition not from different uses but from the same use. [The question
is] ... how we can relate our law in order to prevent the great waste-I am
talking about physical [waste] ... The fact [is] that actually we have a cer-
tain amount of water that has to be allocated; ....only a small fraction of it
can be used because of evaporation, ditch losses and channel losses. The
trend of our law will be possibly a relocation of uses with adequate com-
pensation. Right now it would appear that, in the foreseeable future, stud-
ies will be in the nature of helpful remedies to prevent physical waste.
It may be some time before we will have competition for water...com-
petition, for instance, between industry and agriculture. In New Mexico
we haven't been eminently successful in trying to get industries in; and
therefore we don't have now or within the foreseeable future a situation
where it will be necessary to make such a change in our law to allow this
higher use, if it is a higher use. For that reason I doubt that any radical
change will be practical because we don't have a choice of the use of
water. The main problem is a choice of place of use, and whether we
should change our law to implement the fairly detailed statutes against
prevention of waste, for instance. That would at least be my prognosis
of what will happen in the field of appropriation; and certainly possibly
we will have more changes and proposals in the West, because we have
greater problems than the East. Even though we may have more legis-
lation in the East, from a practical point of view we will probably have
to have more changes in the West, and probably more changes or more
growth in the law of water in the West.
MR. STEELE: It seems to me we have been missing one angle here
in the discussion of the eastern states, that is, we have a trend now toward
water management that I think has gone much beyond what is implied in a
lot of the discussion.







LAW OF WATER ALLOCATION


We have a Federal Watershed and Flood Prevention Act which puts the
Federal Government in the business of giving grants in aid to local spon-
soring organizations for developing a water management plan for the whole
water shed. The Corps of Engineers have been in this water management
business in major streams for years and years. Now we are setting up a
comparable water management scheme for the lands of watersheds and for
the smaller tributaries, and so on, before it gets into these major streams.
These acts are not limited to preventing damages from water. They are
very broad. They provide for putting water to all sorts of uses, including
municipal water.
We in the past in the East, I think, have dealt with the wet side of the
rainfall cycle. Generally, in a lot of the East there is enough rainfall, but
the distribution is such that maybe it is about right 10 percent of the time,
too wet 45 percent of the time and too dry 45 percent of the time. We will
have to change our institutions to deal with the dry side. At least in the
field of agriculture we have reached a point where we can use that water
in conjunction with better fertilizer, better seed, and so on, to get higher
production.
I think instead of facing the situation where an individual is looking at a
stream and talking about a water right, we are facing the situation where the
whole watershed will be under management in time. This is looking to the
future. It will be under management. There won't be any natural flow be-
cause there will be some sort of engineering devices, farm practices, what-
not, that will control the flow. Our future laws, it seems to me, should be
in the framework of what will we do with a managed water supply, not only
to prevent damages, but to get the most beneficial use out of it.
CHAIRMAN BEUSCHER: We were talking a little while ago about study-
ing the actual operations of our governmental institutions that now allocate
water, particularly in the eastern United States, where we know little about
them. We think in terms of some state institutions that have limited auth-
ority of this type, and water districts and other local water-allocating
agencies. I would like to add to that list just local units of government,
general purpose municipal corporations, which are obviously allocating
water in an indirect way, perhaps through the enactment of zoning legis-
lation, for instance.
Are there any other comments on studies?
MR. VAN TUYL: Following up Mr. Steele's comment...there are hun-
dreds of local watershed associations and other groups of citizens who
are getting interested in this problem of water management and land man-
agement. I think we ought not to lose sight of the fact that many of those
people who are associating themselves with their neighbors are going to
be the ones who will allow government to do its part in this whole program.
CHAIRMAN BEUSCHER: Yes. It reminds me of some studies we have
been carrying on at home in connection with the small watershed program






FURTHER STUDIES


that was mentioned...[studies to look] into the governmental, half-way gov-
ernmental, and private groups that are interested in the particular little
watersheds. It is a tremendously complicated thing. You have a county
board; a town board; you have a county-wide (in our state) conservation
district, with a set of offices; you have a watershed association, unincor-
porated or incorporated; and you have an Izaak Walton League; you have
somebody else in the Farm Bureau-and they are all working together
toward a common goal that that watershed be managed. It is not unique to
the West that people work together in connection with these problems of
water management. I am sure that we have ample illustrations that they
work together in the allocation of uses, too.
MR. STEIN: When we are discussing these [possible] studies, [we should
not lose sight of] the tremendous studies (at least in poundage, in weight!)
which evidently are now going on at a federal and local level. ...I think we
have to sense, to understand, what the role of the federal agencies are in
this field. One [point,] I think, is that the Federal Government obviously is
a government of limited powers. A corollary to that, and something that
we sometimes forget, is that the federal departments are also departments
of limited powers. While the water function or the interest in water is
divided among several agencies, the functions of these particular agencies
are very much circumscribed by the statute. The Federal Government
can't, or a particular agency of the Federal Government, can't always do
what the administrator of that agency would want to do, or what a state or
a locality would want them to do. We can only do what we are directed
to do, or authorized to do by the Congress. (Unfortunately, for the lawyer,
it is our dismal function to keep reminding our own administrators and
the people of that all the time!)
With that in mind, and with the tremendous problems involved, I think
the federal agencies in the last few years have come to realize that, by
pooling all their authorities and interests and competencies together, they
may have in the aggregate a rather large group of authority and competen-
cies to offer, failing specific legislation by legislative direction. This
largely started by a letter or directive from the President: the agencies
interested in water resources work got together and now have an inter-
agency committee.
But I think almost more important than that, in several areas of the
country-through the Arkansas-White-Red Basins group; the New
England-New York interstate group; the Missouri Basin group; and in
the Pacific Northwest and Columbia Basins-the various state agencies
got together with their counterparts in the other states, within the limits
of their statutory limitations, and turned out (at least in the first two)
tremendous studies. (We just put down in the cellar Dr. Elliot's five-
foot shelf, and replaced it with the New England-New York study. That's
how large it is!)






LAW OF WATER ALLOCATION


To give you the scope of what the agencies are-our department is the
Public Health Service, one of the smallest in Health, Education and Wel-
fare; Agriculture; Interior; the Corps of Engineers; Labor; Commerce;
and the Federal Power Commission-all participated in this New England-
New York study. The subjects covered (and I don't think I have them all
here) were navigation, beach erosion, flood control and drainage, water
supplies, pollution control, public health, insects, fish and wild life, rec-
reation, agriculture, power development and land management.
I don't think that these large studies will wait for the kind of theoreti-
cal studies we have [been discussing] here, because they are going, and
if we don't catch on or latch on to these studies, they are going to go for-
ward and presumably judgments are going to be made on the basis of their
studies.
I want to call your attention to two characteristics of these studies. One
is that they generally are on a regional basis, an area, a river basin basis.
That raises certain implications, since we are dealing with an area or a
river basin. If we have fundamentally different systems of laws, and I don't
know that appropriation and riparian rights are fundamentally different,
but if states, piece-meal, develop different laws, what is going to be
the effect upon interstate [water matters, since] most of our rivers,
at least the large river systems, are interstate in nature, at least in
the East?
The second point is that all these studies necessarily, because of their
governmental nature, are predicated on the notion that we will work with-
in the framework of existing state law, at least of existing fundamental
state law. I think that is one of the characteristics of what you might term
a planning commission or any kind of government commission. I don't
think such a continuing administrative commission in the nature of things
has the mandate or the inclination to seek methods of changing fundamental
law in the state. But a study commission, having a short life, being divorced
from the ordinary governmental operations, possibly may come up with that
kind of recommendation.
What I would suggest is that the thoughts, both economic and legal, which
have come up in this meeting should be made available in some way to
these study groups which are going on. I think that the studies which have
come out of the Arkansas-Red-White, and the New England-New York
group, would have been much richer if they had these; and I think the tech-
nicians who actually work in that series of specific areas that I mention
would have their thinking much influenced if they had the benefit of this
information.
I think the non-federal people here might well want to get on these
regional study groups through their state organizations, and thus repre-
sent state or local interests. And those in federal agencies who engage
in these studies in the future ought not to overlook the resource which we







FURTHER STUDIES


have found in this room, these many, many experts in the field, and should
draw them into these river-basin studies.
MR. HABER: I would like to comment on what Mr. Stein said. First of
all, (although I may be very professorial here!) in areas where these stud-
ies are beginning or are in progress, a group of states in those areas
might get together and authorize the participants that represent them on
these studies to develop a regional water plan and allocation plan along
the lines that I have suggested.
With the ability there of all the scientific experts and the resources of
the government, plus this idea of allocation and development (with their
interrelation being paramount) it might be possible to do a very good job
much easier than any individual state could do. More than that, in those
states where the interstate problem is so clear-where it is clear that you
really cannot do too much within one state unless you look at the stream's
behavior and use in another state from which it comes or to which it flows,
I think this may be necessary anyhow.
Perhaps you could get the states together to that extent, not that they
would authorize any kind of regional allocation agency as yet, but at least
that they would have a regional allocation plan. Ultimately that doesn't
mean that allocation within states would have to be enforced by regional
agencies.
The plan might work out so that a contract could be made for distribu-
tion of water in great bulk without being very specific as to what happens
in each state. Then the individual states could do the individual allocating,
but the overall interstate picture would depend somewhat on the allocation
pattern within the individual states. This may be a possible step.
The other general point that Mr. Stein made I don't fully agree with. I
think in the particular context he is talking about, a study agency does as-
sume the existing law, and, as I said, to some extent the existing uses
under that law. But, in another context, it might not. I am again referring
to the city planning agencies, which may have no definite regulatory powers.
Nevertheless, it was understood that as the city plans were developed,
further legislation might effectuate them.
When you have an agency that operates that way, where a study agency
is a part of the development of a whole new system of law, where the study
precedes legislation, then it has an entirely different kind of mandate. Its
mandate is not simply to operate within the present law and give some help
to those who are working under it.. It is to develop schemes that would be
of value to the legislators or to administrators who make legislation by
their regulation.
MR. STEIN: May I clarify one point ? I didn't think I went that far. I do
think you should really consider whether an agency of government which
has a mandate to develop new plans and new law feels free to come up with
a fundamental change in basic law.


1






LAW OF WATER ALLOCATION


DISCUSSION: Current water law studies at the University of Michigan.


MR. ZIEGLER: The Legislative Research Center of the University of
Michigan is organized as part of the School of Law to undertake various
research projects in the field of current state legislation, leading, if at
all possible, to the drafting of proposed legislation. The Center is staffed
by a director and an associate director, both faculty members, who are
assisted by four attorneys employed full time as legislative analysts and
by several student assistants. The research product is published in "Cur-
rent Trends in State Legislation."
The Center at present is engaged in a study of water law and water
law legislation in view of the growth of the problem of water distribution
and the correspondingly increased interest of the states in this matter.
In final preparation for early publication is an article on Michigan water
law. Seven additional monographs dealing with problems involved in the
adoption of any water use statute are now in the research stage and will
be published, along with a model water use statute,* in 1958. The mono-
graph topics include: the nature of the riparian concept; floodwaters, use
and control; problems in changing from a riparian doctrine to an appro-
priation doctrine; substantive powers of administrative agencies admin-
istering water control legislation; problems in establishing ultimate state
control over water resources; interstate compacts to control water uses;
and the effect of the model water use statute on present law. The infor-
mation acquired during the first six monograph subjects will form the
basis of the proposed water use statute. Interested national and state
groups, as well as technically trained individuals, will be consulted prior
to the final formulation of a proposal.
















A draft, dated December 9, 1957, of a Model Water Use Act, with comments, is
available in mimeograph form from the Legislative Research Center.




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