The Merced River is the third largest tributary of the San Joaquin River. Before irrigation started in the Central Valley and dams were constructed, the river's natural flow at the mouth was much higher than the current average of , or about per year. Upstream on the river, at Happy Isles, the average flow is . The United States Geological Survey has river gauges at three locations along the Merced River: at Happy Isles, above Lake McClure, and at the mouth. The first two record flows unaffected by dams and human intervention, but discharge at the mouth is chiefly controlled by New Exchequer Dam. The Lake McClure gauge, located at the former mining town of Bagby, is probably the most accurate gauge for flows overall. The average annual flow recorded there was from 1923 to 1966. A peak of was reported there on December 23, 1955. For the mouth gauge, the highest flow was only in 1950. Finally, for the gauge at Happy Isles, the largest flow ever recorded was in the 1997 Yosemite floods, which destroyed many campgrounds, roads, paths, and bridges in the valley.