 As the United States developed the Southwest , the Colorado River was seen as a potential source of irrigation water . An initial attempt at diverting the river for irrigation purposes occurred in the late 1890s , when land speculator William Beatty built the <unk> Canal just north of the Mexican border ; the canal dipped into Mexico before running to a desolate area Beatty named the Imperial Valley . Though water from the Imperial Canal allowed for the widespread settlement of the valley , the canal proved expensive to maintain . After a catastrophic breach that caused the Colorado River to fill the <unk> Sea , the Southern Pacific Railroad spent $ 3 million in 1906 – 07 to stabilize the waterway , an amount it hoped <unk> would be <unk> by the Federal Government . Even after the waterway was stabilized , it proved unsatisfactory because of constant disputes with landowners on the Mexican side of the border . 
