Object: Valuation, depreciation and the rate base

CHAPTER XI 
THE VALUE OF A WATER-RIGHT AND OF RESERVOIR 
AND WATERSHED LANDS 
Value of Irrigation Water. — When water is used for irrigation, 
it makes the intense cultivation of the soil possible. It aids in 
producing crops which can be marketed at prices not subject 
to regulation except by the law of supply and demand. The 
availability and use of the irrigation water modify the character 
and increase the amount and consequently the value of the 
crop. These elements may thus add an increment of value to 
the irrigated land. Under such use the value of the water at 
the field and, by comparison with the cost of development, its 
value at its source can be determined. Water and water-rights 
in districts where water is used for irrigation acquire, in con- 
sequence, a recognized market value depending upon the appre- 
ciation of the land that results from irrigation, upon the value 
of the crops harvested and upon the cost of developing and 
making available the irrigation water. 
Payment for Water-Rights. — Ordinarily when water is to 
be taken from a stream for uses which decrease or otherwise 
modify the natural flow of the stream below the point of diver- 
sion, the riparian rights of lower land owners are thereby affected. 
The diversion cannot be made in such cases without making 
compensation to the riparian owners for the damage to their 
property which results from the taking, except, of course, when 
such owners sleep upon their rights, virtually admitting too 
small a damage to make it worth while to attempt to recover 
compensation. 
To the extent of the cost of extinguishing the riparian rights and 
possibly of securing other water-rights whose use is secondary 
or which for any reason should be merged in one holding, there 
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