In 1922, representatives of the seven Colorado River basin states reached a monumental agreement – the Colorado River Compact – to divide the watershed into an Upper and Lower Basin, with each basin receiving 7.5 million acre-feet of the river's water for beneficial consumptive use.
Arizona's Governor Hunt refused to ratify the Compact, primarily because it allocated water only to the basins, but not directly to the states. Within the Lower Basin, Arizona was competing with rapidly growing California for the same water. The proposed Boulder Canyon Project, which included construction of the All-American Canal in southern California and a high dam on the lower river, intensified this conflict, as the project increased California's access to the Colorado River, to Arizona's disadvantage. Plus, Arizona was concerned about states' rights to tributaries – specifically the Gila River – which were not addressed in the Compact.
However, in the early 1940s, Arizona recognized that, to effectively use its share of the Colorado River, the water would need to be delivered to the growing population in the south-central part of the state. State leaders realized support for such a massive reclamation project would be contingent upon Arizona's ratification of the Compact. So in February 1944, Arizona ratified the Compact, 22 years after it was negotiated.
This action paved the way for negotiations for the Central Arizona Project (CAP), but approval for such a project was not likely until California and Arizona resolved their dispute over Colorado River water allocations. Agreement could not be reached between the states, so in 1952, Arizona went to the U.S. Supreme Court for a judicial decision.
This led to one of the most lengthy and costly cases in Supreme Court history, lasting 11 years and costing almost $5 million. The decision in Arizona v. California in 1963 determined Arizona's Colorado River basic apportionment to be 2.8 million acre-feet annually, California's to be 4.4 million acre-feet, and Nevada's to be 300,000 acre-feet. The court decision also determined that lower basin tributaries, like the Gila River, could not be counted against Arizona's Colorado River allocation.
The case is ironic in the fact that the negotiators of the original Compact hoped to avoid costly and lengthy litigation associated with Colorado River water matters through that agreement. Additionally, Compact negotiators hoped to avoid federal involvement in Colorado River water decisions, but Arizona v. California opened the door to federal participation. The Court's decision interpreted that the Secretary of the Interior was empowered to act as watermaster of the lower Colorado River, and could apportion future surpluses and shortages among the states and even among users within the states.
Meanwhile, Arizona had continually been seeking support for the CAP to divert Colorado River water into its more populous areas, and to agricultural regions where groundwater was being depleted. But the proposal for this federally financed aqueduct to bring approximately 1.5 million acre-feet of the state's Colorado River allocation to central Arizona was still stalled in Congress, hampered by California's strong anti-CAP lobbying.
In 1968, after Arizona agreed that California's Colorado River water would have priority CAP water during water shortages, California withdrew its opposition to the project, paving the way for construction to begin in 1973.
Archive documents (copies of originals):
http://digital.lib.asu.edu/u?/asu-wwdl,4402 – Progress report: news of Arizona's water fight, Central Arizona Project Association, August 1, 1949.
http://digital.lib.asu.edu/u?/asu-wwdl,3294 – Let the Supreme Court Decide, Colorado River Association (California) fact sheet on Arizona v. California, 1947(?)