Water and American Government: The Reclamation Bureau, National Water Policy, and the West, 1902-1935

Published by EH.NET (October 2003)

Donald J. Pisani, Water and American Government: The Reclamation Bureau, National Water Policy, and the West, 1902-1935. Berkeley, CA: University of California Press, 2002. xi + 394 pp. $49.95 (cloth), ISBN: 0-520-23030-2

Reviewed for EH.NET by Peter J. Hill, Department of Business and Economics, Wheaton College.

Donald J. Pisani, Professor of History at the University of Oklahoma, is probably the pre-eminent scholar of water and water policy in the United States. This book is the second in a proposed three volume work that will detail the history of water in the western United States from the California mining camps through the 1980s. His first volume, To Reclaim a Divided West: Water, Law, and Public Policy, 1948-1902 (University of New Mexico Press, 1992) traces the evolution of water law beginning with the California gold fields and ending just prior to the Reclamation Act. This volume discusses water policy from the beginnings of the federal irrigation program in 1902 through the completion of Boulder Dam in 1935. The Reclamation Act of 1902 marked the beginning of major involvement of the federal government in water issues and Pisani uses the Reclamation Service (later the Bureau of Reclamation) as his primary vehicle for explaining the numerous battles and various interest groups involved in water policy throughout this period.

Previously the U.S. Congress had attempted to encourage irrigation in the West through the Desert Land Act of 1877, which allowed a homestead claim of 640 acres if the applicant diverted water from a stream for purposes of irrigation. Also, in 1894, Congress passed the Carey Act, which awarded each western state up to a million acres if the state used that land to encourage irrigation. However, by 1902, pressure had developed to involve the federal government in the actual creation of irrigation projects and on June 1 of that year President Theodore Roosevelt signed the Act into law. Funding for the reclamation projects was to come from the sale of public lands in sixteen western states. Although this was viewed as a way to avoid subsidizing reclamation, the fact that the money would have gone into the federal treasury in the absence of the Reclamation Act meant that federal funds were deeply involved. Also, the repayment schedule from farmers did not require interest on their debt and this extended the subsidy even further.

Pisani presents a careful and detailed analysis of the forces that led to the creation of the Reclamation Service, the most significant of which was the desire to engage in large-scale social and technological engineering. There was a strong desire to develop viable farms throughout the West and, given the aridity of the region, irrigation was seen as a necessity for developing such farms. However, by 1900 there were already seven and a half million acres under irrigation in the western states and even as late as 1920 Bureau of Reclamation projects made up less than 15 percent of the total irrigated acres in the West. It could well have been the case that private efforts were carrying out the economically viable projects and that the “market failure” arguments were a smokescreen for the western politicians’ desire to deliver federal subsidies to their constituents.

Pisani explains in some detail the Bureau of Reclamation’s efforts to develop irrigation works and contrasts those with several private efforts. He also spends a considerable portion of the book explaining the political infighting that went on both within the Bureau and between the Bureau and other agencies. A primary competitor for building dams and carrying out irrigation projects was the Army Corps of Engineers. The Corps had long had the responsibility for river and harbor projects and many in Congress thought it logical for the Army to build the dams necessary for irrigation in the West. The Bureau won most of the battles with the Corps but it faced other threats. The Bureau was located within the Interior Department but most of its efforts were directed towards creating farming communities in the West. Therefore, the Agricultural Department continually tried to siphon resources away from the Bureau of Reclamation and to undercut many of its functions. According to Pisani, the ongoing turf battles within the federal government and the strong desire of the states to maintain control over water rights limited the effectiveness of the Bureau of Reclamation and meant that many of its goals were not achieved.

The book also covers well the expansion of the Bureau’s role to include flood control and generation of electric power. Both of those activities took some of the focus away from the creation of small farms and also enabled the Bureau to create new constituencies and to make it more difficult to measure its effectiveness since the allocation of costs and benefits to the various activities became more problematic.

Pisani’s work is a significant contribution to the history of the West and will be an important reference for anyone interested in understanding water and water policy. The book is primarily a detailed historical record of the personalities and issues involved in government attempts to subsidize irrigation across the West and the author generally avoids discussion of some issues that would be important to economic historians, namely whether the Reclamation projects met a benefit/cost test, or whether the federal projects were truly of a public goods nature. Nevertheless, the volume provides great source material for economists who wish to pursue those issues.

The only significant flaw with the book is Pisani’s somewhat confused discussion of the problem of land speculation. Throughout the early history of the Reclamation Service there was great concern for avoiding speculation, since the overwhelming goal was to create a class of small farmers and it was assumed that people who profited from purchasing land and later selling it were capturing illegitimate gains. However, speculative economic activity is hard to distinguish from other economic endeavors and it is never clear when Pisani reports that speculation was occurring exactly what he is talking about. He reports as evidence for the problems of speculation the fact that there was a high rate of failure among many of the first claimants of the land. However, the failure rate can be at least partially explained by the institutional framework since the Reclamation Service, in an attempt to prevent speculation usually required a five-year period of residence before property rights to the land were granted. Since the price of land was set below the market clearing price, ownership promised economic rents. Hence farmers bid for those rents by settling on the land as soon as possible, often several years before water was delivered to their farms. Therefore, it is not surprising that many farmers found themselves right on the margin of subsistence and often unable to win their bet with the federal government that they could survive until farming the land was profitable. However, Pisani’s mishandling of the land speculation issue is a small problem and the overall quality of the volume is high. The book represents an important contribution to the history of institutional development in the West.

Peter J. Hill, George F. Bennett Professor of Economics at Wheaton College, Wheaton, IL is the co-author with Terry L. Anderson, of The Not So Wild, Wild West: Property Rights on the Frontier (forthcoming, Stanford University Press, 2004).