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Show 62 payment and agreed to pay interest of five percent on the remaining balance over a ten- year period. 25 For this sum, they were to receive the irrigation works that had been constructed and most of the water rights to the system. The state retained some water rights in hopes that it would be able to sell additional land. In effect, the state had provided the canals at slightly less than cost, and donated to the owners most of the water rights for the land serviced. Though the reservoir land grant fund stood to lose a substantial amount of principal on the transaction, it was felt the benefits to be derived from successfully reclaiming the land would compensate. 26 Unfortunately, the new owners of the project did not meet the required payment schedule; in fact, only the initial down payment was received. In 1923 the state declared the original contract void and repossessed the rights to the land and water. Of course, neither the land nor the water rights were of value to the state if they were not used for the intended purpose. Since the rights and structures could not be moved, the state worked to resell the rights as soon as possible. In 1926 a second contract was drawn up with much the same people as had earlier contracted with the state. The selling price was reduced to $ 30,000, with a $ 3,000 down payment, with five percent interest to be collected over a twenty- year period. 27 Unfortunately, problems soon arose concerning legal title to water rights in the area. The result of the litigation was that the second contract went into default. Again the state received only the down payment. In an effort to minimize its losses and to force the water users to pay for the water rights and irrigation structures, the state sought legal action against the Panguitch water users. The courts appointed a third party to administer the water rights and supervise the project. The courts also directed the farmers to pay the land board reasonable amounts on their debt until the project had been amortized. Due to depressed agricultural conditions in the late 1920s followed by the depression of the 1930s, no payments were received after the litigation was concluded. 28 Therefore, even though the Board of Land Commissioners owned the system, no money was returned to the reservoir land grant fund during the late 1920s and 1930s to repay the project's cost. The Hatchtown project can only be classified as a total failure. The wide array of problems, including difficult environmental circumstances, technical difficulties, and the depression proved to be too much for the state's development framework. The state was badly discredited as an agency of water development by the time it was able to end its association with the project. State of Utah, " Biennial Report of the Board of Land Commissioners for the Years 1919 and 1920," Public Documents, p 7. ^ Since the projects had been undertaken with the goal of promoting settlement and putting the available water resources to beneficial use, it must have been generally felt that getting settlers on the land was more important than recovering the cost of the projects since the governor, legislature, and citizens allowed the sale. 27State of Utah, " Fifteenth Biennial Report of the State Land Board of the State of Utah for the Years 1925 and 1926," Public Documents, p 9. ^ State of Utah, " Twenty First Biennial Report of the Land Board of the State of Utah for the Fiscal Years of 1937 and 1938," Public Documents, p 8. The Land Board members reported the amount of principle lost on all of the projects. The total indebtedness was excused by legislative action in 1937. |