Irrigation in Southern Idaho started in the Boise Valley. By 1863, lands immediately adjacent to the Boise River were being farmed. One year later, Idaho's first canal companies were being formed.
Under the Desert Land Act of 1877, a settler could buy 640 acres of irrigatable arid land for $1.25 an acre - if he could irrigate his land within 3 years. This qualification often proved impossible to meet, since irrigation was costly and water often too far away. On April 1, 1877 water was first diverted from the Little Wood River where Gooding now stands.
By 1890, when Idaho became a state, most of the lands adjacent to the Little Wood and Big Wood Rivers were taken up with irrigation found in many stages. You could find one-man digging his own ditch to irrigate land next to the river and several neighbors joined together to build community ditches, which they delivered water to their farms farther away from the river.
In 1894, under provision of the Carey Act, arid states became entitled to select arid lands and to contract with companies or persons for the building of necessary reservoirs and water conduits for the irrigation of these lands.
In 1899, a meeting of individual people concluded that the Big Wood Cottonwood Canal Company, Ltd. was to be formed. The main purpose of the corporation was to maintain a diversion located along the Big Wood River, to divert water to Marley and Northern Shoshone by use of the Cottonwood Slough. The diversion dam was known as the Cottonwood Canal Dam.
In 1902 Congress passes the Reclamation Act, also known as the National Irrigation Law, where Congress decided to deposit monies received from the sale of public lands into a Reclamation Fund which would be used to build and maintain irrigation works.
In 1903 the first land opening in Idaho was held in Shoshone. S.D. Boone, who spent a great deal of his time and money promoting Idaho, attended this opening. He had a habit of referring to irrigation water as "magic". He was elected Chairman of the Wood River Valley Irrigation Association. Lincoln county joined with Blaine county in talks about water rights and locations on where dams were to be built.
On November 17, 1905 an announcement was made to build a reservoir on the Big Wood River. It would be opposite Tikura, a loading station on the Oregon Short Line Railroad. On November 25, 1905 Mr. F.P. King, Engineer, was completing his large survey map covering the land to be submerged by the backwaters of the dam. As requested earlier by Mr. Boone, he printed the name of the dam in large, black letters on the bottom of the map:
Big Wood Canal Company's Water
The Establishment of the Company
BIG WOOD CANAL COMPANY
AMERICAN FALLS RESERVOIR DIST. NO. 2