California’s Central Valley Project? The Feds Bailed Us Out

Ethan Rarick
California Fellow at the Institute of Governmental Studies at UC-Berkeley, and the author of California Rising: The Life and Times of Pat Brown.

In making his case during the State of the State speech for the proposed high-speed rail system and the pending water bond, Gov. Jerry Brown acknowledged that big-bucks projects are often met with derision. He noted that the Central Valley Project was begun during the 1930s, when critics called it a “fantastic dream” that “will not work.” (I’m relying on the prepared text of the governor’s speech, as posted by the Los Angeles Times.) The day before, Brown’s spokesman, Gil Duran, used the same example to defend the governor’s plans, telling the Times, “We built the Golden Gate Bridge and the Central Valley Water Project during the Great Depression.”

I don’t disagree with the larger Brown/Duran point that grand ambitions require a certain audacity even in the face of troubled times, but to set the historical record straight, it should be noted that the state did not build the Central Valley Project during the Great Depression or at any other time. In fact, when it comes to the CVP, California tried to build it, flopped, and had to be bailed out by the federal government.

A little history: The basic idea of the Central Valley Project – damming the Sacramento River in the far north and then artificially channeling the water southward to improve agriculture in the San Joaquin Valley – is an old one. It was first proposed substantively in the 1920s, when it was envisioned as a project that California would build on its own. But it was defeated, first in the Legislature and then repeatedly by the voters.

It was revived in 1931. This time there was a proposal for minor federal help, but it was still fundamentally a California project, as attested by the name: The State Water Plan. Two years later, the Legislature approved what was then a sizeable $170 million bond issue to start building it. This was certainly, as Duran says, “during the Great Depression,” but that quickly proved to be an enormous problem. With the economy in the tank, nobody had the money to buy the bonds. The state was faced with a grand vision it could not afford to complete. So in a series of steps, the state turned to Washington for salvation.

First the Legislature acceded to the demands of New Dealers that power from the would-be project be sold by public agencies. Then FDR opened the pipeline for federal construction money. And finally, in 1937, the U.S. Bureau of Reclamation took over completely. [Like everything related to California water, this has been written about many times, but for my money the best single-volume source on all California water history is Norris Hundley’s magnificent book, The Great Thirst. If you want to know water, get a copy.]

Federal ownership made a big difference in the long run. Water from the Central Valley Project was subject to the federal limit of 160 acres. Through the years the policy certainly frayed around the edges, but the federal limit was still a key reason that Big Agriculture pushed so hard for the State Water Project – the dam-and-canal system that was started by Gov. Pat Brown, although in far better economic times than today.

Maybe the current Gov. Brown is right that the state can afford massive new infrastructure investments even in the aftermath of the Great Recession. But, at least when it comes to water, that’s not what happened during the Great Depression.

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