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Mr. WELLING. Water diverted to East Mesa and sold to water users would have to bear their share of the all-American canal and the laterals necessary to carry water out to it. Mr. Davis. And their share of the storage. The CHAIRMAN. We will hear from Mr. Swing.

STATEMENT OF MR. PHIL D. SWING, CHIEF COUNSEL IMPERIAL

IRRIGATION DISTRICT IN SUPPORT OF H. R. 6044.

Mr. Swing. I assume I will not have time now to make a full statement, and I would like to take 'exception to one thing that Mr. Davis says, although I heartily concur in practically everything he says, and that is with reference to the one leg of the canal. At least, I want to state the point of view of the people of Imperial Valley. In our opinion the construction of the one leg of the canal would be of no benefit to our territory, and, in fact, they consider it would be an actual detriment, and I will tell you why. In fact, they call it the Mexican leg, because it would be, if completed, of benefit solely and only to the Mexican interests, because while it would afford a more adequate diversion for the water out of the river, when you had gotten it out, it would be consumed in Mexico before the increased amount ever got to the Imperial Valley. We would pay for it, but we would get none of the benefits. It would help Yuma; it would remove the menace which they complain of, resulting from the construction of these temporary weirs. It would give them a power site for the development of hydroelectric power, which they need and which under our contract they are to have, which would be at Araz, for the openinof their mesa, but it will be of particular benefit to the people of Mexico, and it is what they are advocating, and they want it built down to there and then stop, and to do that would simply saddle the people of the Imperial Valley with added burdens, with bonds to pay for the cost of it, the benefit of which would be entirely taken up and consumed by new lands put in in Mexico. It would do us no good and it might give these Mexican lands a greater claim to a water right, to join hands with them and deliver them water diverted by the Government at Laguna Dam under the contract we now have with the Government. At the present time, in my opinion, they have absolutely no water right at all, and before the hearing concludes I want to quote an opinion of Attorney General Judson Harmon to that effect.

Mr. LITTLE. If this goes to the line, will not the Mexicans entirely secure the same vested rights as you people have?

Mr. Swing. I am afraid they would.
Mr. LITTLE. Which they would not get this other way?
Mr. SWING. Yes.

The CHAIRMAN. Just a moment. There is a call for a quorum. I think we had better take a recess now.

(Thereupon, at 12.15 o'clock p. m., the committee took a recess until 2 o'clock p. m.)

AFTER RECESS.

The committee met pursuant to the taking of recess at 12.15 o'clock p. m., Hon. Moses P. Kinkaid (chairman) presiding.

The CHAIRMAN. We will now hear you, Mr. Swing.

STATEMENT OF MR. PHIL D. SWING—Resumed. ·

Mr. Swing. Mr. Chairman, I went to Imperial Valley in 1907 and have lived there continuously ever since. From 1907 to 1911 I was deputy district attorney of the county; from 1911 to 1915 I was elected and held the office of district attorney of the county; and since 1916 I have been attorney for the Imperial irrigation district. Everything I own and possess, and all I hope to own and possess, is centered in Imperial Valley.

Mr. KETTNER. Knowing Mr. Swing as I do, I want to state what he is too modest to state, that just recently he has been selected by the governor of the State of California and appointed as superior judge of Imperial County.

The CHAIRMAN. The reporter will note the fact, and we congratulate Mr. Swing:

Mr. Swing. I would like to state to the members of this committee that this is not a real estate scheme, nor any promoters' proposition we are submitting. We represent the plain American farmers of the Imperial Valley, who are fighting for their homes and a chance to live.

Imperial Valley lies in the Salton Sea Basin in the southeastern corner of the State of California. This basin is 110 miles long by 40 miles wide. The southeastern portion of the basin sloping from the international line to the Salton Sea is called Imperial Valley. The northwestern portion beyond Salton Sea is known as Coachella Valley. This country, although of exceedingly rich and fertile soil, was formerly a barren desert for lack of water, the rainfall being very light—some years less than 1 inch.

In 1893 the California Development Co., a private corporation, was organized to exploit the possibilities of reclaiming this land by diverting and conveying the waters of the Colorado River into the valley. As a result of its efforts water was first brought into Imperial Valley for irrigation in 1901. Development followed rapidly and for a time success seemed to crown the undertaking beyond the wildest dreams of its promoters. The connection of these early promoters with Imperial Valley was ended in 1906, when, as a result of their shortsighted policy in spending insufficient money to provide ordinary safeguards for their intake, they lost control of the Colorado and allowed the whole river to break through into Imperial Valley. The Southern Pacific Railroad, to protect its own investments, then took control of the company and operated the system until 1909, when a receiver was appointed. At the receiver's sale in 1916 the people of the valley purchased the system as a matter of self-defense and to prevent their sole source of water from falling into the hands of any private concern. The price was $3,000,000.

Mr. SINNOTT. Will you tell us just what you bought there?

Mr. SWING (indicating on map). They bought the Hanlon ranch, which consists of a piece of property facing on the west bank of the river, adjoining the boundary line on the American side. They bought the intake structure, machinery, and equipment there; they bought such portions of the system as lay in Imperial County north of the boundary line, and the canal known as Central Main, about 20 miles long, and the west of said main, 26 miles long. They bought whatever water rights the former concern had, and they bought all the stocks in the Mexican Co, which was operating the system south of the line.

Mr. SINNOTT. Was that purchase made by your irrigation district ?

Mr. Swing. Yes; it was purchased by us in this way: We having nothing but bonds which were of uncertain marketable value, we entered into a contract with the Southern Pacific, whereby the Southern Pacific agreed to bid the property in at whatever price we stated, we being present at the sale and directing their bidding, and they were to take our bonds for the price of which they bid in the system.

Mr. SINNOTT. They bid in?

Mr. Swing. The Southern Pacific Co. put up the cash and took our bonds.

Mr. SINNOTT. Then, you have control over that canal running into Mexico?

Mr. Swing. In a way which I will explain later on. It is a rather imperfect control.

Referring now to the Imperial irrigation district, all the land in Imperial Valley susceptible of irrigation by gravity flows from the existing system, amounting to 584,700 acres, has been organized under the laws of the State of California into an irrigation district called the Imperial irrigation district; and it is by means of this instrumentality that the people own and operate that part of their irrigation system lying in the United States. About 400,000 acres of this land has been reclaimed to date and is now the home of some 60,000 people. During the year 1918 there was shipped out of the Imperial Valley, at a conservative estimate, $40,000,000 worth of farm products.

In this pamphlet which I have laid upon your desk is the statement in the back that Imperial Valley produced over $50,000,000 worth of farm products in 1918. My figures are based on what was shipped out, and the difference in the figures has been estimated as what was consumed by the people in that valley themselves. I think with that explanation the statements found in this little pamphlet are quite accurate.

Mr. BROOKS. And also the difference in the statements as to the stock going in and coming out.

Mr. Swing. We are the winter-feeding ground for a great many cattle brought in from Arizona and New Mexico and fattened in an average of about three months, and then shipped out to Los Angeles and to Kansas City and sold, and I have made the allowance for that, too; we are only entitled to the additional weight put on, and we do not claim the credit for steers raised in Arizona and New Mexico.

The canal, which supplies this land with water, heads in the Colorado River at the Rockwood intake, about 11 miles north of the international boundary, thence crossing the line almost immediately makes a long detour through Mexico and recrosses the boundary line into the United States at several points about 50 miles west of

think, with thonsumed by thace in the five

its origin. Aside from the intake, practically all the main canals and principal works are situated in Mexico, the title and management of which are, by requirement of Mexican law, vested in a Mexican corporation called the Compania de Terranos y Aguas.

The CKAIRMAN. What distance is water conveyed in the Alamo River?

Mr. Swing. The point on the international boundary line where it recrosses into the United States is about 50 miles west of where it first crosses at the rives. The canal itself is about 60 miles long. The 10 miles additional is because of the route.

The fact that the Imperial Valley's irrigation system is located almost wholly in a foreign country and subject to the caprices of the chaotic Government of Mexico has given rise to grave problems which not alone endanger its progress and prosperity but which menaces its very existence.

The predicament in which Imperial Valley finds itself is not of its own choosing, nor of its own creation. The get-rich-quick promoters of the early California Development Co. in the very beginning deliberately forged the shackles of slavery for the unborn Imperial Valey, in order to give themselves the maximum opportunity for gains with the minimum liability for their acts.

The scheme devised by these men for exploiting the Imperial Valley was as follows: The California Development Co. would divert the water from the Colorado River at a point within the United States. This would give them the benefit and protection of the laws of the United States and at the same time, as they did not care to place themselves entirely at the mercy of Mexico, the American intake gave them an effective check by means of which they could control the source of water if Mexico became unruly, for the Mexican lands are also dependent upon this system.

The physical control of the water thus diverted was then at once passed across the international boundary line to a subsidiary Mexican corporation called the La Sociadad de Yrrigacion y Terrenos, the entire stock of which was owned by the California Development Co. The former company was the companion company for the old California Development Co. It went into the hands of a receiver the same time the California Development Co. went into the hands of a receiver.

Under the laws of California a corporation appropriating water for sale and distribution is subject to regulation by the State. But by getting the water out of its control and out of the United States, the California Development Co. would avoid this interference with what it considered its private affairs. The Mexican company, which at all times was beyond the reach of American laws and courts, transported the water through Mexico and back to various points of advantage on the boundary line, where the water was sold and delivered on such terms as it chose to make.

The question of who should buy the water, however, was not left to chance. On the contrary, the California Development Co., with an eye to its own interests, in advance of the arrival of the actual settlers, organized various mutual water companies, each with its own locality to serve, put in dummy directors, and then caused these dummy directors, to bind their companies and their stockholders to be the future settlers, by executing whatever contracts the promoters desired. In every instance these mutual companies were required to enter contracts to buy their water perpetually from the Mexican Co., and from no other source. Also the water companies were compelled for inadequate consideration to turn over their entire capital stock to the California Development Co., which, having a monopoly, required all water users to buy stock in some one of these mutual companies. To the settlers it sold the stock at the highest obtainable price.

The mutual water companies were also organized as a convenience and protection to the promoters. It saved them the friction and annoyance of having to deal with the individual water user by making these former organizations responsible for the collection of the water rentals from the settlers. Then, too, the mutual water companies were used as a buffer between the actual water user and the supplying corporation to enable the latter to further avoid any liability from loss from possible water shortages. The reason for that is that neither the California Development Co. nor the Mexican Co. made any contract with the water user direct; they only dealt with the mutual companies.

Therefore, if the farmer suffered a loss on a crop he could only sue the mutual company which was obligated to serve him with water, and if he got judgment against that company it would only be a judgment which he and his neighbors would have to pay, and probably the mutual water company would not be liable, as it could deliver only such water as it received from the Mexican corporation, and this mutual company could get nowhere with a suit because it neither owned land nor crops. Therefore its case in court would be only a case to secure nominal damages, and to get that it would have to go into Mexico where the company, with which it had a contract, existed.

The first step in the scheme to defraud American citizens and rob them of their birthright to use the waters of an American stream in reclaiming American lands to make American homes, was a contract which, on December 28, 1900—this was before there was any water drought in Imperial Valley—these promoters caused their American corporation, the California Development Co., to execute in favor of their Mexican corporation, the Sociadad de Yrrigacion y Terranos, whereby the American corporation agreed to “to perpetually deliver to second party a sufficient amount ”-in fact, all; there was no one else to deliver it to, as you can see from the topography of the country-" of the water diverted by party of the first part from the Colorado River to enable second party to furnish water for the irrigation of the lands situated in Lower California and in the State of California, United States of America, which are irrigable by gravity flow from the system of canals só constructed.” The contract further provided that all users were to have the same water rights, Mexican lands equally with the American.

The CHAIRMAN. How did they get a permit under those conditions?

Mr. Swing. They did not have to secure a permit at that time. They just posted a notice and said "I file upon 10,000 second-feet of water and intend to put it to beneficial use.” That was the old law before the creation of the present Water Commission.

The generosity and magnanimity displayed by these gentlemen toward Mexico in disposing of the waters of the Colorado River

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