THE VALUE OF WATER-RIGHTS 
is then — a public utility being under consideration — an invest- 
ment to be assumed in that intangible element, the water-right. 
Sometimes by reason of local development and high values 
of riparian lands and an already established use of the stream 
flow for power, the cost of settling with the riparian owners and 
of eliminating adverse use of the water may be large. At other 
times the situation is such that equally good rights to use 
water may be secured without any cost except the cost incident 
to the construction of the project features and the acquisition of 
the necessary lands and rights of way. 
Water-Rights have Value. — The fact that in the first case it 
will have to be conceded that the owner of the public utility is 
entitled to have the cost of the water-richt which he holds made 
a part of the rate-base and that at least to the extent of cost 
(reasonable and actual proper cost being assumed), this water- 
right has or should be made to have value, justifies the public 
in concluding that the other water-right which has cost nothing 
should have a similar value, whether the same be made a part 
of the rate-base or not. Water-rights, then, are to be regarded 
as having market value. When the water is developed and is 
actually being put to use or when the need of putting the water 
to beneficial use is proximate, the existence of such value is 
easily recognized. When an investment has been necessary to 
quiet title to adverse rights and to meet other expense of securing 
the water-right, the propriety of including its cost in the rate- 
base is unquestioned. 
Water-right Value in the San Joaquin and Kings River 
Canal Case. — The Supreme Court of the United States in “ San 
Joaquin and Kings River Canal and Irrigation Co. vs. The 
County of Stanislaus” (233 U.S. 458) in reference to the 
fundamental principle of taking the value of water-rights into 
account when rates are to be fixed, says, in its decision reversing 
the decree of the lower court: 
“By a statute of March 12, 1885, the boards (of County 
Supervisors) are authorized to fix these rates for their several 
counties, but so that the returns to the parties furnishing the 
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