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<br />I <br /> <br />I <br /> <br />25 percent of the owners of irrigated lands to be included in the <br />district. Since conservancy districts were intended for the benefit <br />of agricultural interests, the degree to which property in an incor- <br />porated city or town could be used was limited. <br /> <br />I <br /> <br />I <br /> <br />(4) Federal Involvement. <br /> <br />I <br /> <br />As Governor Elbert had foreseen in 1873. federal participation <br />in western water development was necessary to provide the needed <br />capital for reclaiming the land for agricultural use. The economic <br />depression of the l890s and populist demands for governmental relief <br />finally spurred Congress into action.160 The Reclamation Act of <br />1902161 provided for federal development projects which would be <br />financed by leasing the captured water to individual water users. <br />This system proved to be economically unsound, however, and the act <br />was amended in 1939 to allow repayment of construction costs by <br />, contract with users' organizations, with the federal government <br />absorbing some of the expense.162 <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />b. Transbasin Diversions. <br /> <br />I <br /> <br />In some areas, notably the South Platte basin, the natural <br />flow of the stream had been entirely appropriated, and it occurred <br />to a number of people that one solution to the shortage of water <br />might be to divert water out of watersheds which were not heavily <br />used and to introduce it into others which needed water. The state <br />took an early lead in this type of project. A statute of 1889 appro- <br />priated funds to study "the sources of the Grand, Laramie, and North <br />Platte river systems, with reference to turning the unappropriated <br />waters thereof eastward, and causing them to flow into and through <br />the tributaries of the South Platte and Arkansas river systems for <br />the purpose of irrigation and other beneficial uses."163 <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />This was not the first of these diversion projects, however. <br />In 1860, water was brought across the Continental Divide to provide <br />water for mining in the area around Fairplay. This project was 164 <br />extended in 1912 to supply the growing needs of the City of Denver. <br />In 1909, the historic Gunnison Tunnel was opened~ bringing water from <br />the Gunnison River into the Uncompahgre Valley.los This project was <br />completed with federal funds provided under the Reclamation Act of <br />1902. <br /> <br />I <br /> <br />I <br /> <br />Transbasin diversions had been discussed at the Constitutional <br />Convention on Mr. Stone's suggestion that they be denied priority of <br />right; however, Chairman Plumb argued successfully that this type of <br /> <br />I <br /> <br />I <br /> <br />11-24 <br /> <br />I <br /> <br />I <br />