First, one should note that a “water right” is the right to use water in a certain amount, taken from a certain place, applied upon a certain place and sometimes, during a certain time period. All water use rights are also subject to limitations of reasonable, customary and beneficial use.

  During the Gold Rush, the miners followed the Mexican laws governing individual property creation: (1) discovery, (2) “appropriation” (or physical control), (3) due diligence and (4) continuous beneficial use. They also recognized the better of competing claims as being; “first in time, first in right.” Since mining required a great deal of water, the miners used the rules of appropriative water rights to take or control water from a stream and convey it through ditches and flumes to a location where they were actively mining gold. In Siskiyou County , hundreds of miles of ditches were dug in the 1850s-70s to move water around for gold mining. A large majority of these ditches passed over unoccupied public lands. (For instance, the 1856 “Big Ditch” or China Ditch spanned almost 100 miles from Grenada through Shasta Valley to Hawkinsville.)  At the same time, lateral ditches were dug to take water to farmers for irrigation of their crops.

Then along came the new state of California , which accepted the English Common Law as its basis. English law recognized “riparian” rights. A riparian piece of land is one that borders a river. Included as part of the ownership of riparian land is the right to use water for domestic needs, (gardens, orchards, and livestock.) There is also the riparian right to use water for power generation, commercial livestock herds and gravel extraction. However, these uses carry a secondary preference. The riparian right transfers as part of the land. Riparian users have a “correlative” right. That means that available water is equitably apportioned among them.  Riparian irrigation is generally flood irrigation and the excess water or “tailwater” is returned to the stream for the next user.

The “dual system” of California water rights merges the two legal concepts (appropriative and riparian) together using the principles of “first in time, first in right.” Under the concept of “absolute territorial sovereignty,” the courts accepted that while the land was still in federal hands, California riparian rights had not yet attached to the land. It was only after land was homesteaded that riparian rights attached. At that time, there could already be a diversion ditch and an appropriative water right at that location to which the land was subject as an easement. The riparian right would then be junior to the appropriative one.

In 1911, the California State Legislature declared that "all water or use of water within the state of California is the property of the people of the state of California ." At that time, several court cases established that the people’s claim could only apply to “surplus water” – water available for use over and above what had already been claimed as private property or as a federally “reserved” riparian right.

In 1914, the legislature enacted the California Water Commissions Act establishing that the use of these surplus public waters was to be granted by revocable license, and subject to regulation by the State as a privilege.

One may hear local farmers and ranchers talk about pre-1914 water rights. That is because many of the water use rights in Shasta and Scott River Valleys date back to the Gold Rush. They are private property. They are also considered “vested” property rights. (Dating way back in English law, it was held that a sovereign’s grant of property cannot be annulled or later modified by the grantor through legislation or otherwise. The rights have vested.)