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Show 65 The Legislature's Response The Board of Land Commissioners attempted to minimize losses by working to keep farms in operation after depression economics caused farmers to fall behind on their payments. The balance of the farm loan account steadily decreased after 1928, and the program itself was discontinued in 1933. By that time, the state had adopted a policy of foreclosure and resale of delinquent properties in an attempt to replenish the reservoir land grant fund. The board also refinanced the Carbon Water Company and assumed control of its assets in 1932.36 Due to mounting financial deficits and political pressure growing from the Land Board's various water development programs, the legislature took action in 1937. It dealt with the financial problems of the Piute Project owners and the Central Utah and Carbon Water companies by excusing their debts to the state upon the payment of $ 1 to the state of Utah by each organization. 37 The legislature wrote off the debts incurred for the construction of the projects, allowing the organizations to continue operating by paying only ongoing and maintenance costs. The total cost to the state of Utah in the actual water development experience was substantial. In addition to the direct costs mentioned above, the state's reservoir land grant fund lost the interest from the date of investment to 1937. The direct cost plus interest of the two state projects and the two private companies in 1937 is estimated to have been $ 4,405,789.38 To calculate the loss to the state's reservoir land grant fund, the payments the state received with interest need to be deducted from the above figure. The sources from which payments were received were as follows: ( 1) Payments made on the Piute Project before selling the project to the water users in 1920. These were effectively zero because they had been deducted by the state officials in the selling price of $ 1,300,272. ( 2) Payments made by the Piute Project's owners after 1920. The state only received one payment of $ 65,000 before the Piute Project owners quit making payments altogether. ( 3) Two down payments made by the Hatchtown Project buyers; $ 9,000 in 1919 and $ 3,000 in 1923. ( 4) Bond payments by the Central Utah and Carbon water companies. The bonds are valued at their 1928 balance in the above cost figure. After 1928 no payments were received by the land commissioners. ( 5) The token payments made in 1937 on their respective debts by the Piute Project's owners, the Central Utah Water Company, and the Carbon Water Company of $ 3. After deducting these payments and their accumulated interest from the total cost, an estimated $ 4,229,206 loss was sustained by the reservoir land grant fund when the debt was 36 An account of the foreclosure on the Carbon Water Company's assets is in State of Utah, " Twentieth Biennial Report of the State Land Board for the Years 1935 and 1936," Public Documents, p 12. 37State of Utah, Laws of the State of Utah Passed at the Regular Session of the Twenty- Second Legislature Convened at the Capital in the City of Salt Lake January 11th, 1937 and adjourned Sine Die on March 11th, 1937 ( Kaysville, Utah: Inland Printing Company, 1937), Chapters 154, 155, 156, pp 266- 267. '' This figure is only for the expenditures from the reservoir land grant fund. The present value of costs of the Hatchtown project are computed only through 1925, at that time the court assigned a third party to run the project and the state's relationship with the project was at an end. The reason for not stopping the interest charges on the Central Utah Water Company's bonds is that the Land Board assumed ownership only under the condition that the bonds would still be honored. ( See following note 39 for the net loss to the land grant funds). |