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STATEMENT OF MR. MIKE LIEBERT, OF SEELY, CALIF.
Mr. LIEBERT. Mr. Chairman and gentlemen of the committee, the Imperial County Farm Bureau is an organization covering the entire county of Imperial, Calif. The purpose of this organization is to foster the best interests of the farmer in his every endeavor. It aims to improve and provide for his needs in social life; acts as the instrument for the conveyance and exchange of ideas and knowledge relating to soil and crop culture; and last, but not least, proper consideration is given to the various phases of his financial needs.
As a member and director of this county-wide organization, which it is my pleasure to have been chosen to represent in this hearing before your committee, I beg to say that the question of farm loans has been demanding its most serious consideration.
Much money is needed to defray the expenses incurred in leveling, ditching, and providing the land with water for irrigation that paying crops may be produced. Funds must be on hand or provided for defraying living expenses of the family while the initial reclamation work is being done. One can not appreciate the serious meaning of all this unless he has gone through the experience of entering upon a tract of barren desert land and pioneering it through the development stage until same becomes a crop-producing farm.
Having settled with my family upon such a tract of land in Imperial Valley eight years ago, I claim to be in position to know something of the many hardships encountered; I know something of the reclaimer's needs in a financial way; I know the assistance he must have to weather the storm successfully. Ofttimes he is compelled to borrow funds to tide him over this expensive and nonproducing period. His borrowing is usually done through regular banking channels. To secure the necessary credit he gives as security a mortgage on his chattel property. This mortgage may even include his scant household goods. These loans are usually made with the understanding that they will be retired with funds derived from a loan made against the land as security. However, such loans on the land can not be made until, by virtue of the United States land laws having been complied with, the title has passed to the entryman from the Government.
Therefore when the farmer acquires title his first duty and obligation is to obtain a loan on his land. Accordingly, after Congress had passed the Federal farm loan act the farmers of Imperial Valley asked the farm bureau to take such steps as would be required that provision might be made at once for their taking advantage of its benefits. Some farmers needed funds to meet improvement debts as mentioned above, others to purchase live stock that their farms might be made more productive, others to further improve their farms with needed fences and buildings, while others needed funds with which to pay off maturing mortgages that had been placed on the land for a short term of years and at a very high rate of interest.
As a result of the bureau's efforts three farm loan associations were formed in Imperial County in accordance with provisions of the loan act, and applications were accepted for loans. This was in the spring of 1918. The Seeley Farm Loan Association, of which I am a member, received loans for 13 of its members, with loans amounting to about $40,000. These loans were made by the Federal farm loan land bank of Berkeley, Calif. At this juncture of affairs, without official notice and without any explanation on the part of the farm land bank, the bank suspended all further applications which it held for loans on Imperial Valley property. These applications were afterwards canceled. We were nonplused over this action, especially as it had never been indicated to us in any manner that such a move was contemplated on the part of the bank. The rumor reached us that the bank had suspended all applications, for the reason, it had decided, not to advance further loans on lands under any irrigation project until their engineer had first reported to them regarding the project's status and future possibilities. We could not understand why this decision had been made, so far as Imperial Valley was concerned, as its possibilities, we thought, were well and favorably known. That we might know the real reason why our loans had been turned down and in the interest of Imperial farmers (who were in dire need of loans) I was commissioned by the bureau to go to Berkeley for an interview with President Joyce, of the Federal land bank.
In September, 1918, I called upon President Joyce, in company with Prof. Packard, of the University of California. In our interview President Joyce stated that he was very much interested in Imperial Valley; that he considered it the best and most promising field in his district in which to make loans, but, notwithstanding all this and the fact that he desired his bank to make a good showing in comparison with other land banks over the United States, he did not feel justified in asking the people of the United States to buy the bank's bonds secured by Imperial Valley land mortgages, which mortgages would be made at a low rate of interest and for a long period of years, until the valley had first stabilized its water conditions. He stated further that it was not really necessary to make any investigations in Imperial Valley regarding the water condition, for the people themselves gave proof of the unsatisfactory condition by trying to get away from their present system of taking and handling water. He further advised us that the people should at once take such steps as would be necessary to put the water system in proper control. I informed him that at that particular time a contract was being drafted with the Interior Department making it possible to satisfactorily solve our water problems, and that if such contract was drafted along the lines as anticipated the people would ratify it and put it into force. His reply was to the effect that when the valley had stabilized its water system he would be glad to come into the field and resume loaning on Imperial lands. After the people had ratified the contract as mentioned above, and which contract we have filed with your committee, we again made application to the bank for loans, but without success.
In the interview with Joyce it was our conclusion, judging from his statements, that the reason for his not making a written report to the farm bureau as to suspension of loaning was because of the detrimental effect such a report would have on the valley.
Now, Mr. Chairman and members of the committee, a coordinate branch of this Government has put its stamp of disapproval upon Imperial Valley because of its water conditions. We have done our best to better the condition, but we have gone as far as we can without aid, and this aid must come soon if it would be of any avail. We are confronted with a series of conditions that are unsurmountable. We have come to our Government for assistance to aid us in stabilizing our water system, a system through which flows the very life-blood of our existence. We ask it to help us remove the stigma and thus make our securities second to none. Help us to get the system into our own hands instead of being at the mercy and caprices of a government whose laws are fixed from day to day as its exigencies may require and whose only interest in our affairs is dependent upon the amount of money that can be justly or unjustly squeezed out of us. Help us to cast off the bonds of abject slavery that are dragging us to ruin. Lend us its aid that we may become firmly established on American soil with our irrigation system. The farmers of Imperial Valley feel that they are justly entitled to an equal share of the benefits of their Government. The Government has accepted our filings and has given us our deeds to the land by virtue of our having complied with the laws of the land. We have built our homes and schools, and we ask our Government to help us keep them intact. True it is, some of our lands are owned by nonresidents, a very unhealthy condition for any community I am sure you will admit. They rent these lands to Japs and Hindoos, who undermine our social standards, destroy the efficiency of our schools, and fill our courtrooms. With the stabilization of our water system these lands can and will be subdivided and sold to actual home builders; therefore we will rid ourselves to a great measure of a class of people to whom the United States has seen fit to deny the right of citizenship. With this stabilization brought about, the real American home builder will be able to borrow money cheaply and for a long period of years and thereby own a home of his own, whereas at the present time it is impossible. Under present conditions it is almost impossible to borrow money on farm lands except at an exorbitant rate of interest. I recall to mind a neighbor of mine who was forced to make a loan. After figuring up his commission, appraisement, and inspection charges his rate of interest was 14 per cent. The effect of our present unsettled condition is far reaching. Many farmers would like to sell part of their holdings to relieve themselves of present labor conditions and other heavy overhead expenses, but are unable to do so on account of land values being so low they can not sell except at a loss. I know of land selling for less than it cost to level and water stock it. In many instances a single crop grown upon the land is worth more than the land would sell for. With the water system finally and properly adjusted, plenty of which will be assured for all purposes. At present the farmer can only stock his ranch on a basis of the minimum water supply. Or, in other words, he can not keep more live stock than his land will produce feed or pasture for during the period of the occasional summer water shortage, which shortage is due to our inability to divert the water from the Colorado River, though at the time the discharge of the river is often several times the amount of our needs. Crops, such as corn and milo maise, which can be planted in July on land from which barley and wheat has just been harvested, are often a complete failure, due to the lack of water. The all-American canal, the building of which the passage of this bill will make possible, will provide all water needed and at a time when it is most needed.
In conclusion, Mr. Chairman and members of the committee, I wish to state that the bill now before your committee, is looked upon by the farmers of Imperial Valley as one which when enacted into law and its provisions carried out will completely and satisfactorily solve the water difficulties. If enacted into a law a new era is in store for Imperial Valley. It will not only make it possible for the 60,000 people who populate this great American Vile Valley to remain, but will provide whereby many more thousands and tens of thousands may come to found good American homes. In case aid is not extended, then this wonderful country must revert back to the desert as known before the days of Barbara Worth. Sixty thousand souls will have lost their all and with broken spirits and shattered hopes will be compelled to seek a new abode.
Mr. SINNOTT. What is the average size of the holdings in your district ?
Mr. LIEBERT. We have figures in No. 1, which is the largest water company, of 76 acres. That gives some indication of how it will go, because it is the oldest irrigating company in the district.
Mr. TAYLOR. If there is any member of this committee that hasn't read the book The Winning of Barbara Worth, he ought to read it, because it is a most fascinating novel and pictures in beautiful way the early history of this valley.
Mr. Smith of Idaho. There is one question I would like to ask Mr. Rose and Judge Swing, and that is with reference to the length of time of these bonds that you propose to issue. It seems to me if you put them out over a period of 40 years, it will be more difficult to get this through than if you would make them not exceeding 20 years. I think we should have something definite with reference to the plans of the district on that proposition.
Mr. Swing. I think that is a matter that might well be left with the Secretary of the Interior. Our people will adjust themselves to whatever regulations and requirements he makes in that matter.
Mr. Smith of Idaho. The Secretary of the Interior is not so much concerned about that, I believe, as the Secretary of the Treasury, who is objecting to the bill.
Mr. Swing. That is a considerable sum of money, and it can be paid most successfully by making it cover a considerable period of time. I think it would be a good thing to have payments begin at a very early date.
Mr. Smith of Idaho. Now, would the terms of the 20-year law on Government reclamation projects appeal to you?
Mr. SWING. On those there is no interest. The initial installments there are no more than the equal of the interest on this.
Mr. BARBOUR. Could you not, Mr. Swing, after 20 years have enough of that paid off so that the district itself could then issue another series of bonds and refund these Government bonds?
Mr. HUDSPETH. It seems to me that at the rate you are going-I understand that you marketed $37,000,000 worth of produce here last year, and at the rate you are going you will pay this out before 20 years, it occurs to me-in two or three years.
Mr. SMITH of Idaho. At any rate, you could refund the bonds in 20 years.
Mr. Swing. I think that is so.
Mr. Rose. I would like to say just this much; that, of course, there is this to be said, on some of that land you are going in to reclaim practically 500,000 acres which is now a desert, and it will be possibly 4 years from the time we start before that particular land will receive water; and, of course, that land—the bonds on that land ought not to commence to mature until probably 10 years and then run over the period of 15 years. To make it 10 and 25 would be very acceptable, I think.
The CHAIRMAN. What other witnesses now are to be heard ? Does this close the case of the Imperial Valley delegation?
Mr. Swing. Yes; that closes our case, Judge Kinkaid, except what will be filed without being read.
The CHAIRMAN. Then, there are two witnesses here from Yuma? Mr. HAYDEN. Yes, sir. The CHAIRMAN. How long will that take? Mr. HAYDEN. I do not believe that their statements will take very long. I would first like to have you hear Hon. Mulford Winsor, State senator from Yuma County, Ariz., who has been intimately connected with the Yuma reclamation project for more than 20 years.
STATEMENT OF MR. MULFORD WINSOR, OF YUMA, ARIZ.
Mr. WINSOR. Mr. Chairman and gentlemen of the committee, I had hoped to be able to conceal the fact that I was a State senator, but I will have to plead guilty since Representative Hayden has made the charge.
Mr. TAYLOR. Some of us who have been State senators for a long time will sympathize with you.
Mr. WINSOR. I would never recognize it. You all look like intelligent gentlemen. My home is at Yuma, Ariz., and, as Mr. Hayden has said, I have been connected as a farmer and as a member at different times of the board of governors of the Yuma County Water Users Association for 24 years. I was one of the pioneer settlers in that locality and have assisted in some way or other in various projects for the reclamation of the lands in the Yuma Valley.
Col. Fly and myself are representing the Yuma County Water Users' Association here because we thought that this was a matter that directly affected the Yuma project and because it bears a relation to the contract which was entered into a year ago last April between the Imperial irrigation district and the Secretary of the Interior, at which discussion we were here representing our people.
I want to say that we are very much in favor of the enactment of this measure with such amendments as will be found proper, not only because we are interested in the reclamation of the arid land, a subject that has been close to us for practically all of our lives, but because this plan does present a solution of a very great problem that exists between the two projects on the opposite sides of the Colorado River. That problem, I think, should be perhaps more clearly set out than it has been at this hearing, and at any rate should be emphasized.
As has been stated, it has been found necessary by the Imperial irrigation district, in order to maintain its water supply during seasons of low water, to construct a weir dam immediately below what