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Show 34 With residents of the central counties leading the way, mutual irrigation companies ( the local associations by which Utah's farmers administered their developing water systems) everywhere took advantage of the law to incorporate. Incorporation provided a certain amount of immunity from liability to stockholders, equity versus debt financing, and an effective means to collect delinquent assessments by sale of capital stock. Updated by incorporation, the mutual irrigation companies continued to manage most of Utah's irrigation systems throughout the 19th century and on into the present. 46 The Speculative Corporation as a Water Company Corporate water companies were more a development of the decades after 1880. These corporations differed from the mutual companies in that they were organized with private profit for the owners, rather than for water development and use per se. They also differed in that the company, and not the water users ( after 1880), owned the water resources. Further, they were not publicly controlled, and service areas were determined by economic considerations rather than elections or public interests. Water was acquired by purchase and individual users were not necessarily responsible for maintenance or distribution. Water was simply delivered to the buyer's fields, ditch systems, or business. Coorporate projects ranged in size from small locally funded undertakings to those large enough to involve multiple counties and draw investors from all over the United States and Europe. Success depended not only on the quality of the design and engineering but also on the economic potential of the project and willingness of experienced farmers to participate. There were few mechanisms to exclude speculators, ensure sales, or force payment for delivered water. Speculators, impoverished or recalcitrant farmers, and a variety of competing water uses complicated the task faced by these early corporations. The problem was fundamentally one of financing and cash flow necessary for construction. Ironically, it was the same law ( the Act of 1880) which allowed companies to purchase, move, and deliver water independent of land that also allowed speculators to buy land under a project without incurring any obligation to purchase water or contribute to the system's upkeep. The Bear River Canals Project was an early attempt at water development by a private- for- profit corporation. Involving at one time or another water from the Ogden River as well as the Bear River, the project was first conceived in 1868. Preliminary investigations led promoters to feel a project of such magnitude could not be undertaken without federal aid. 47 Using railroad land grants as a related precedent, they sought a government subsidy. When this was turned down, the project was abandoned until 1883. At this time Alexander Toponce, John W. Kerr, and other local interests known as the Corinne Mill Canal and Stock Company and a promoter named John R. Bothwell launched another effort. 48 The corporation that was formed from this merger was known as the Bear Lake and River Water Works and Irrigation Company. 46Wells A. Hutchins, Mutual Irrigation Companies in California and Utah ( Washington D. C: Government Printing Office, 1937), p 2. Speaking of the mutual irrigation companies' importance to Utah Hutchins states: In Utah irrigation is an indispensable factor in agriculture and has been on a cooperative basis from the first. The average Utah company, generally speaking, does not serve a large area of land; but it is the dominant irrigation organization, and the service it performs is of inestimable value to that State. Also see George Thomas, Institutions Under Irrigation, pp 55- 56. 47Ibid., p 204. ' Alexander Toponce, Reminiscences of Alexander Toponce, new edition, ( Norman: University of Oklahoma Press, 1971), pp 195- 285. |