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. , . the shores, and rivers, and bays, and arms of the sea, and the land under them,.. . [are to be] held as a public trust for the ben- efit of the whole community, to be freely used by all for navigation and fishery... Waddell, page 413 The court concluded that the state of New Jersey owned the beds of navigable waters in its sovereign capacity. Waddell, page 410. The idea that a state owns its resources in a "sovereign capac- ity" is a key element of the public trust doctrine. This is important primarily because it greatly restricts the state's ability to dispose of its resources.6 However, this restriction is not a complete prohibition against the disposition of trust properties. A state may even make large- scale grants of trust properties, although courts usually interpret these grants quite restrictively and apply a more rigorous standard when the conveyances are to private parties? See People v. California Fish Company (1913) 166 Cal. 576. Authorities suggest that the disposition of trust properties for public water projects fits within the standard for an appropriate grant of trust propertyS This is especially important in California, since virtually all of the state's major water projects impact trust properties. The Illinois Central Case Although Martin v. Waddell made the public trust part of federal law, the most significant Supreme Court public trust decision came in Illinois Central Railroad Company v. Illinois. (1892) 146 U.S. 387 [36 L.Ed. 1018]. Professor Sax described this case as the "lodestar" of American public trust law, and as perhaps the single most influential public trust case.9 This case arose after the Illinois legislature granted submerged lands, in fee simple, to the Illinois Central Railroad. This grant in- cluded lands underlying Lake Michigan and comprised virtually the entire commercial waterfront of the city of Chicago. In 1873, when the legislature realized that it might not have been wise to have given away what was becoming extremely valuable commercial real estate, it repealed the 1869 grant and brought an action to declare the original grant invalid. 6 Lazarus, page 637. 7 Sax, page 486. 8 See Dunning, "The Significance of California's Public Trust Easement for California's Water Rights Law," 1980, 14 u.c. Davis L.Rev. 391; Little- worth, "The Public Trust v. The Public Interest," 1988, 19 Pacific L.J. 1219-1221. 9 Sax, page 489. The "lodestar" of American public trust law is the 1892 Supreme Court decision in Ulinois Central Railroad Co. v. Ulinois. Chapter 3 Consumptive and Environmental Uses 75