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What is a Ditch Company?

Mutual ditch and irrigation companies, commonly referred to as "canal companies" or "ditch companies," were privately owned water stock companies. They were organized under state corporation laws, and therefore their legal status varies somewhat from state to state. There is no federal government involvement in canal companies, and very little state involvement. Yet, as an organizational sector, they manage the largest share of western water resources today.

The following definition first appeared in the 1920 U.S. Irrigation Census. It is still valid today, attesting to the startling resilience of this organizational type. “The most common form of organization for cooperative irrigation enterprises is the stock company organized under the general incorporation laws of the state, with most of the stock owned by the water users. Water is apportioned on the basis of stock ownership, and the cost of annual operation and maintenance is raised by assessments on the stock. There is not, in most cases, any necessary relation between amount of stock owned and area of land owned or irrigated, although there is a tendency for the two to be proportional. In fact, stock may be owned independent of land ownership, and it may be, and is at times, rented, the lessee receiving the water apportioned to the stock rented. This renders the stock collateral for loans, and it is sometimes used in that way.”

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