Mutual companies own and operate more than 50,000 miles of irrigation ditches, canals, and pipelines.

down to the present generation an irrigation system of community ditches usually regarded as cooperative enterprises.

In California many of the mutual irrigation companies were organized to take over and operate irrigation systems originally constructed by land development companies. In the early days land development companies often found it necessary to install an irrigation system in order to sell the land. After the company sold the land it had little or no interest in the irrigation system. Frequently the company encouraged the new landowners to organize a mutual company to take over and operate the irrigation system. In some cases transfer of ownership to the new landowners was accomplished more or less automatically by transferring one share of stock with each acre of land sold. Thus when sales were completed, ownership of the irrigation system rested in the hands of the new landowners.

Not all California companies originated in this manner. Landowners organized some of them to obtain addi

tional supplies of water when the original supply proved to be inadequate. They set up certain mutual companies to take over and operate irrigation districts that had to be reorganized and others to take over and operate irrigation systems originally developed under the Federal Reclamation Service. In all instances, however, the purpose of the mutual company has been to supply water to member landholders at cost.

Comprise Two Types

Mutual irrigation companies are both stock and nonstock organizations. Both types exist for the same purpose and perform the same general service. They differ principally in location, size, and methods of operation.

About two-thirds of the mutual irrigation companies are still unincorporated. Generally these are the smaller companies operating in situations where expensive facilities are not required. Even so there would be considerable advantage in these companies' becoming incorporated.

The incorporated company has authority to enter into contracts, borrow money, hold property, and transact business in the name of the corporation. It can do this in a way that limits the liability of its members as individuals.

In an unincorporated company a business transaction often can be blocked by a minority of the members and this slows down the activity of the company. Only when the group is small and members will work together can the unincorporated company operate satisfactorily.

In New Mexico and Arizona the "community acequia" is a semipublic institution with many cooperative features. It is public to the extent that all landholders in the area are required to help keep the irrigation ditches clean and in usable condition. Contributions in this regard are frequently in the form of donated labor rather than in cash.

Maintenance and operation of the system are in charge of a committee elected by those who use it. One-man, one-vote is the general rule. The system operates on a nonprofit basis and provides water to its members at reasonable cost.

This type of irrigation is best suited for use where expensive irrigation works are not required. It also fits an area where farms are small and the background and temperament of the people will permit them to work together informally in small community enterprises. This type of organization is not well suited for use in any area where extensive irrigation facilities are needed.

In California, Utah, and most other Western States where irrigation is practiced on a large scale, many of the irrigation companies are of the capital-stock type. The capital stock ordinarily serves two purposes. First it serves as a means of raising capital for building the necessary irrigation facilities such as dams, canals, and ditches. Second, the company uses the capital stock as a basis for allocating water and assessing operating costs. Thus a share of capital stock in a mutual irrigation company frequently represents not only an equity in the or

Forty-acre irrigated potato field. Mutual irrigation companies confine their service almost entirely to furnishing water for irrigation to members at cost.

ganization's assets, but also a right to receive a certain proportion of the irrigation water delivered by the company. In many instances the water rights that go with the share of stock is the thing that determines its market value and not the assets it represents.

In some companies the stock is attached to the land served by the company and cannot be sold except at the time the land itself is sold in which case the stock automatically goes with the farm.

Most of the stock companies are incorporated. This not only limits the liability of the members, but also aids the company in carrying on its operations in a businesslike manner.

Offer One Vital Service

The service performed by the mutual irrigation company is confined. almost entirely to furnishing water for irrigation to the members on a nonprofit basis.

To bring irrigation water to member farmers, it is usually necessary for the irrigation company to construct, maintain, and operate certain facilities such as dams, canals, and ditches. In some areas the company uses pumping stations extensively to bring up subsurface

water.

For the most part mutual irrigation companies do business only with members who use the water exclusively for growing agricultural crops on arid or semiarid land. Delivery of water to some nonmembers does not affect the mutual status of a company, however. In a few instances water is furnished to nonfarmers for household use and

other purposes. When this is done in any substantial quantity, it is not uncommon for the irrigation company to form a separate subsidiary corporation to handle this part of the business. Otherwise the irrigation company can be declared a public utility and become subject to all the regulations applied to this type of business.

In addition to the task of obtaining water and bringing it to the area where

it is needed for growing crops, the mutual irrigation company must devise a way to allocate the water equitably among members. Sometimes the company allocates water on an acreage basis. More frequently it allocates water on the basis of shares of stock owned. This makes it extremely important to have the stock distributed among members in proportion to their water needs.

Owned as Other Groups Are

Member-patrons of a mutual irrigation company own and operate it in much the same way as any other cooperative. Membership is voluntary, and legally a farmer may affiliate with or withdraw from the company at will.

Economically, however, his freedom of action may be much more restricted. If a farmer must have irrigation water in order to operate his farm successfully and the mutual company is the only source from which the water can be obtained, his legal right to withdraw at any time has little meaning. Ordi

narily all farmers that require irrigation and live in the area served by the company are members.

Voting in a mutual irrigation company may be on the basis of one-man, one-vote or on the basis of stock. Most frequently it is on the basis of stock. However, this basis of voting in these companies does not carry the same significance as in most business corporations or even in cooperatives of other types. Since an irrigation company uses its stock as a basis for allocating water, it follows that the company distributes its stock among the farmers in proportion to their patronage. Thus voting on the basis of stock, in this case, means also voting on the basis of patronage.

Management of a mutual irrigation company is vested in a board of directors elected by members. The board makes rules and regulations for operating the irrigation system and distributing water to the users. It formulates administrative policies and hires employees to carry them out. Usually the president or the secretary of the board

is designated as manager of the company. This officer then has general supervision over all the activities of the company, including operation and maintenance, construction, financing, membership relations, and contacts with other organizations.

Show Accomplishments

The most recent statistical information pertaining to mutual irrigation systems is that collected by the Bureau of the Census. Data assembled in 1950 shows that 9,378 such companies were operating that year. Approximately one-third of these associations were incorporated. Altogether these cooperative associations served 138,880 farmers and irrigated almost 8 million acres of land.

States with the largest number of companies were: Colorado with 2,265; California, 1,270; Montana, 1,152; Utah, 1,040; Idaho, 996 (table 14).

The mutual companies reported operating 8,120 dams, 1,032 reservoirs and storage places, over 50,000 miles of canals, conduits, tunnels and pipelines, and 2,428 pumping plants. The cooperative investment in these facilities amounted to about $262.5 million in 1950.

Mutual irrigation in the past has been confined largely to the 17 Western States where irrigation needs have been greatest. With the development of supplemental irrigation, which has occurred in many Midwestern and Eastern States in recent years, mutual companies may sooner or later find a place in these areas.

IN ADDITION to the services al

ready mentioned, farmers have become interested in cooperating to supply other rural needs. Among them are soil conservation, telephones, electricity, health facilities, and dairy herd improvement.

Soil Conservation

Local farmer organized and farmer managed soil conservation districts work at conserving the soil in all States and Territories and in watershed protection and flood prevention projects in many parts of the country. Such districts cooperate with the U. S. Department of Agriculture's Soil Conservation Service in these projects.

The formation of soil conservation districts makes possible effective, cooperative group action, so essential in conservation of agricultural land. Responsibility for formulating the local program and carrying it forward is

placed in the hands of the people who have most at stake.

The Soil Conservation Service, the Department's action agency in soil and water conservation, began assisting farmers and ranchers through districts when the first ones were organized in 1937. The small watershed protection. program was started in 1953.

Soil conservation districts are established by initiative and referendum of local people under State authorizing laws. All States and Territories have district enabling laws. Soil conservation districts are formed by local landowners and operators. They register their wants first by a petition and later by a popular vote. The districts are managed by local farmers and ranchers elected to the district's governing body. District supervisors base their work programs on needs of the community and problems individual farmers and ranchers confront in applying a conservation program to the land.

Other advantages available to individual farmers and ranchers through district organization are: (1) Technical assistance in working out and applying practical conservation farm plans; (2) use of special conservation equipment which individuals find difficult or costly to obtain; and (3) materials, such as seed or planting stock of special erosion control plants not easily obtained otherwise.

As of January 1, 1955, there were 2,649 soil conservation districts in the United States. They embraced 4,845,599 farms and ranches covering 1,461,024,773 acres, or approximately 89 percent of the farms and ranches in the Nation.

Through a local watershed organization the people are in a position to work together to improve their entire community by managing land and water resources. By initiating and carrying out a watershed program, local people demonstrate that they are eager to protect and to accept the custody of their natural resources. Immediate goals are to improve land use, stabilize water supplies, and reduce upstream flood damage, reservoir silting, soil erosion and stream damage.

In each case some responsible local organization (often a soil conservation district) must initiate the project and give active sponsorship to it. In addition to initiating the program of watershed protection and flood prevention, the watershed organization accepts the responsibility for adapting plans to local requirements, sharing in the costs, and making provisions for applying and maintaining the measures needed for soil and water conservation and flood prevention.

As of March 1955, 250 local watershed organizations had asked the U. S. Department of Agriculture for help in developing watershed work plans. The Soil Conservation Service had authorized planning work in 43 of the watersheds in 24 States. The watersheds range in size from 2,000 acres to more than 200,000 acres.

Telephones

The first farm mutual telephone companies in this country were organized around 1900. Prior to that time very few farmers had telephones. From about 1880, when the first commercial telephone companies were organized, until the first patent rights expired in 1894, telephone lines were confined almost exclusively to larger cities. With the expiration of the patent rights, numerous manufacturing concerns and independent promoters quickly came into existence. First, telephone lines were built in the smaller cities and towns and then in rural areas.

The telephone was the first of our so-called modern conveniences to reach the farmer. At the turn of the century there were no radios, no hardsurfaced roads, no automobiles, and no R. F. D. routes. Farm families were very much isolated, particularly in the winter. Once farmers learned the convenience of telephoning, the demand for service was great. Lines could not be built fast enough. The industry was new, and commercial companies were building mostly for cities and towns. Some independent promoters were beginning to build rural lines, but the rate of progress was slow. In order to speed up the service and hold cost to a minimum, farmers began organizing mutual companies to build their own lines. Between 1900 and 1910 hundreds of mutual companies came into existence throughout the Midwest and in other parts of the country as well. The development continued into the 1920's, after which it declined somewhat.

In order to expand their market, manufacturers of telephone equipment encouraged the development of mutual companies in rural areas. Some of them published circulars and bulletins telling farmers how to organize a mutual telephone company. Salesmen sometimes picked up the idea and carried it to farmers.

Sometimes the advice farmers got