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had seen the privatization of public lands in mountain watersheds as a threat, had argued for <br />establishment of the U.S. Forest Service in order to achieve resource management practices that <br />would increase water yields, not reduce them. (Gillilan and Brown 1997). They deeply resented <br />the new twist in Forest Service policy that was threatening to reduce the yields of their long <br />established water projects. <br />For its part, the Forest Service noted that it was required by law to impose by-pass flow <br />conditions on the two cities and a mutual irrigation company. The water users argued, in <br />response, that federal demands for "by-pass" flows were prohibited by law. <br />Reserved Rights Doctrine <br />? The Federal reserved rights doctrine has been a highly contentious in the West for most of <br />. the twentieth century. The doctrine holds that the Federal government, when setting aside lands <br />, for public purposes that require water, the very act implied a reserved right of water sufficient to <br />fulfill those purposes (Arizona v. California, 373 U.S. 546 (1963)). This court-made position is <br />? traced back to the establishment of Indian reservations in 1888 (Winters v. United States, 207 <br />? U.S. 564 (1908)). The U.S. Supreme court has read this doctrine restrictively, to limit rights to <br />• the minimum amount of water necessary to accomplish the Federal purpose (Cappaert v. United <br />• States, 426 U.S. 128 (1976)). Reserved rights were interpreted as coming from unappropriated <br />water at the time that the land was set aside, and that the right has an appropriation date back to <br />? the date of land reservation. <br />The federal government began to set aside large tracts of land in the late 1800s, <br />establishing a public domain of Indian homelands, Army forts, historical sites, monuments, and <br />wilderness areas. However, water issues were seldom directly addressed at the time of <br />reservation. For years after the Winters decision (1908), federal reserved water rights were seen <br />as a minor part of Indian law that applied only to Indian reservations until 1963 (Gillilan and <br />Brown 1997). In many watersheds, reserved water rights have constituted a serious threat to state <br />water users because so many Federal reservations were made sufficiently early-in the late 19' and <br />early 20`' centuries-that such priorities could be among the he more senior rights in a basin. In <br />addition, the rights were rooted in federal law, not state law, and are presumably not subject to be <br />diminished by states (Corbridge and Rice 1999 : 441-470). The entire concept of federal reserved <br />water rights thus served as sufficient threat such that water users everywhere in the West <br />organized to oppose federal actions that could potentially erode either their appropriations under <br />state authority and their project water yields. <br />Legal Battle <br />In Arizona v. California (1963), the U. S. Supreme court, without appearing to invest as <br />much consideration as some in the states would have liked, ruled that all Federal land <br />reservations, not only Indian reservations, fall under the reserved rights doctrine. In this case, <br />federal agencies claimed water for Lake Mead Natural Recreation Area, Havasu Lake National <br />Wildlife Refuge, and the Gila National Forest. The Forest Service had been party to that decision <br />because of its holdings of forest land within the lower Colorado basin watershed. The agency <br />34