One of the major obstacles facing Idaho’s economy at the turn of the century was lack of water for farming. Although early settlers built canals to water the crops, the lack of a widespread irrigation system prevented many farmers from settling in Idaho. The Carey Land Act of 1894 was designed to help settle arid and semiarid land in the West. It authorized Western states to sell federal land to settlers on the condition that at least part of each tract sold be cultivated and that the state assist in irrigating the tract. The act was particularly effective in Idaho and resulted in the irrigation of vast fertile but arid lands in the Snake River valley, especially after 1900.
Major irrigation projects were also undertaken in Idaho under the terms of the Reclamation Act of 1902, which made federal funds available for irrigation. The Minidoka Project consisted of a storage system located in Jackson, Wyoming, and a series of dams in Idaho. The Boise Project built the Arrowrock Dam on the Boise River in 1915. When completed, it was the highest dam in the world. The new dams provided water for field irrigation. The Minidoka, Boise, and later projects also gave Idaho ample water for expanding industrial and domestic uses. Irrigation helped develop three of Idaho’s important crops: potatoes, peas, and sugarbeets. At the turn of the century, agriculture was the leading economic activity in Idaho, and it continued to hold that position until the late 20th century. During these decades, agricultural production in the state expanded greatly as farm acreage, irrigated land, and crop yields increased.
The expansion of the state’s agricultural base encouraged a number of related activities, especially food processing.
Large-scale commercial lumbering developed in Idaho shortly after 1900. Activity was centered in the northern part of the state, where there were magnificent stands of white pine. By the 1920s, lumbering was Idaho’s second most important economic activity. However, the industry’s growth was checked by several factors. First, a disastrous forest fire in northern Idaho and adjoining Montana in 1910 scorched one-sixth of Idaho’s northern forests. Second, the opening of the Panama Canal in 1914 permitted companies on the coast to send their lumber to East Coast cities by ship, while companies in Idaho had to rely on relatively more expensive rail transportation. "Idaho" © Emmanuel BUCHOT, Encarta, Wikipedia
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