The irrigation district can only succeed where cost of construction is light, and where soil and climate render the lands highly productive, as in southern California. Western men were becoming convinced that if the homestead law was to have any meaning west of the hundredth meridian, government must come to the aid of the settler, first in the adjudication of water rights, and second in the construction of the more costly irrigation works.This statement is put into an interesting context
... much of the reclamation work remaining to be done is beyond the scope of private enterprise. The federal government alone is able to undertake construction on the scale necessary to convert the great interstate watercourses such as the Missouri, the Big Horn, the Yellowstone, the Snake, the Grand, the Green, and the Colorado to their highest efficiency as irrigating systems.Thus we can see that private groups were able to complete projects that were economically efficient, but that the government would have to develop other projects, because
the government can afford to wait decades for returns on capital invested, water right charges can be gauged by what the settler can afford to pay, and considerable leeway allowed before cancelation of entry. A private company would be ruined by so generous a policy.Others might interpret these words to imply that projects would only be built if the government was willing to give them away below cost (using Other People's Money to fund them), which is in fact what happened with most Reclamation projects; see Dead Pool for Reclamation's early failures (I'll be blogging on Boswell's cotton operations and Westlands Water District soon).
The article totally ignores the current problem -- how to reallocate water from irrigated agriculture to urban or environmental demand -- which is simultaneously not a surprise and a sign of how difficult it will be to rejig the system.
Bottom Line: We knew 100 years ago that most irrigation infrastructure in the western US was not cost-effective, but we built it and proved it was not cost effective, a Pyrrhic victory. Now we face the difficulty of reallocating water in the face of changing demand, as well as rising costs from environmental destruction that were never included in the cost column of the political ledger.
* Several contemporary economists have written updates on these issues: