Academic journal article Texas Law Review

Chinatown: Owens Valley and Western Water Reallocation-Getting the Record Straight and What It Means for Water Markets

Academic journal article Texas Law Review

Chinatown: Owens Valley and Western Water Reallocation-Getting the Record Straight and What It Means for Water Markets

Article excerpt

In this Article I examine the notorious Owens Valley water transfer to Los Angeles. Not only was it one of the largest private water exchanges in U.S. history, but it remains pivotal in the political economy of western water reallocation. It involved negotiations over land and water rights between representatives of the city of Los Angeles and approximately eighteen hundred farmers and town lot owners between 1905 and 1935. By 1935, Los Angeles had acquired 95 percent of the farm acreage and 88 percent of the town properties in the valley. The water transferred from Owens Valley, a marginal agricultural area, made possible the growth of Los Angeles, and Owens Valley remains the largest single source of water for the Los Angeles Basin. Yet, the Owens Valley transfer has a very negative legacy and has hindered subsequent efforts to reallocate water from agriculture to urban and environmental uses. The negotiations for water rights and land took thirty years to complete and were often acrimonious. I analyze the negotiations between representatives of Los Angeles and Owens Valley farmers to determine the sources of bargaining conflicts. I also evaluate the economic impact of the exchange on both parties to show that each party was made substantially better off. Yet, the notion of "theft" remains. To explain this, I examine the distribution of the economic benefits of the water and land sale. Distributional issues take on greater importance when there are valuation disputes and the gains from trade are shared very unequally. With these insights, I conclude with lessons for contemporary western water reallocation.

"It seems to us that the importance of the Owens River project to the City of Los Angeles cannot be overestimated."

-Los Angeles Board of Water Commissioners, Report on Water Supply, 19 06.1

"And at last the drop that fell as a snowflake upon the Sierra's crest and set out to find its home in the sea, shall be taken up from beneath the ground by a thirsty rootlet and distilled into the perfume of an orange blossom in a garden of the City of the Queen of the Angels."

-Los Angeles Board of Public Service Commissioners, 1916.2

"Dry Ditches, In a bleaching land, A broken pane, A swinging door, And out upon, A withered field, Where blue blossoms, Once nodded in the sun, A rusted plow, Deep furrow, In the crusted sand."

-Marie and Will Parcher, 1934(3)

"You have any idea what this land would be worth with a steady water supply? About 30 million more than they paid for it."

-J.J. Gittes (Jack Nicholson) referring to land in the San Fernando Valley, in the movie Chinatown, 1974(4)

"[F]armers remain suspicious of the 'Owens valley syndrome'. . . . The 'theft' of its water . . . in the early 20th century has become the most notorious water grab by any city anywhere . . . . [T]he whole experience has poisoned subsequent attempts to persuade farmers to trade their water to thirsty cities."

-The Economist, July 19, 2003(5)

I. Introduction

The story of how the Owens Valley lost its water to urban Los Angeles's swelling population in the early 20th century is an integral part of the settlement history of the western United States. More importantly, the story also plays a vital role in shaping contemporary debates over the struggle for access to water. Indeed, Owens Valley stands as a sentence in discussions of the dangers of water transfers from rural to urban areas. It is used as a metaphor by opponents of water reallocations to demonstrate all that can go wrong with these practices. Even proponents of contemporary water exchanges emphasize that their proposals will not be another Owens Valley.

Owens Valley was the first large-scale rural-to-urban water transfer, completed between 1905 and 1935; it continues as a pivotal event in the political economy and law of western water. While the story resonates most forcefully in dry regions of western states, the fate of Owens Valley has been invoked as a warning to rural communities throughout the country faced with losing their water to burgeoning urban populations whose expanding demand for water exceeds available supplies. …

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