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water supply for the irrigation of the lands affected by the provisions of this act. SEC. 11. That the proportion or amount of the cost of the canals and works, the construction of which are authorized by this act to be borne by any irrigation district, State land-settlement board, soldier settlement board, water users’ association, corporation, or individual, as fixed and determined by the Secretary of the Interior, may be paid in cash, and when so paid shall be deposited in the Treasury to the credit of the lower Colorado River project fund, and may be used by the Secretary of the Interior in the same manner as the receipts from the sale of certificates of indebtedness, notes, or bonds of the United States as provided in this act. SEC. 12. That any and all moneys that may hereafter be in the Treasury of the United States to the credit of the lower Colorado River project fund are hereby reserved, set aside and authorized to be appropriated to carry out the objects and purposes of this act. SEc. 13. That the certificates of indebtedness, notes, or bonds of the United States by this act authorized shall be exempt from taxes or duties of the United States as well as from taxation in any form by or under State, municipal, or local authority, and a sum not exceeding one-tenth of 1 per centum of the amount of the certificate of indebtedness, notes, or bonds issued under the provisions of this act is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, to pay the expense of preparing, advertising, and issuing such certificates of indebtedness, notes, or bonds: Provided, That the United States shall be reimbursed for such expenditure out of the proceeds of the sale of such certificates of indebtedness, notes, or bonds. SEC. 14. That the public lands of the United States declared by the Secretary of the Interior to be susceptible of reclamation under the provision of the act, and included within any irrigation district or any other similar organization the boundaries and bonds of which are accepted by the said Secretary under the terms of this act, shall be subject to the provisions of the act entitled “An act to promote the reclamation of arid lands,” approved August 11, 1916 (Thirty-ninth Statutes at Large, page 506), notwithstanding the district may contain more than a majority acreage of such public lands. SEC. 15. That should a surplus remain in the lower Colorado River project fund, of the money received from the sale of the certificates of indebtedness, notes, or bonds of the United States, as authorized by this act, after a declaration by the Secretary of the Interior of the completion of construction of the canals and works herein authorized to be constructed such surplus shall be credited as payment on the principal and of the certificates of indebtedness, notes, or bonds of the United States issued hereunder and a similar credit applied on the bonds of any irrigation district, water users' association, or corporation held by the Secretary of the Treasury on account of said project. SEC. 16. That should a surplus remain in the lower Colorado River project funds, of the moneys received from the sale of public lands, as authorized by this act, after a declaration by the Secretary of the Interior of the completion of construction of the reservoir or reservoirs necessary for the storage of water for the irrigation of the lands affected by the provisions of this act, such surplus may be utilized by the Secretary of the Interior in making further investigations respecting the problems of water storage and flood control on the Colorado River. SEC. 17. No right to the use of water for land in private ownership shall be sold under authority of this act for a tract exceeding one hundred and sixty acres to any one landowner nor shall any water be delivered to more than one hundred and sixty acres in any one township unless, in the judgment of the Secretary of the Interior, such lands in private ownership now possess an adequate and valid water right. SEc. 18. That in the sale of public lands affected by this act preference shall be given for sixty days to persons honorably discharged from the military or naval forces of the United States: Provided, That whenever practicable preference shall be given to honorably discharged soldiers, sailors, and marines when labor is employed on any work done under authority of this act. SEC. 19. That the Secretary of the Interior is hereby authorized to perform any and all acts and to make such rules and regulation as may be necessary and proper for the purpose of carrying the provisions of this act into full force and effect. SEC. 20. That nothing in this act contained shall be construed as in any way amending or affecting the act to provide for an auxiliary reclamation

project in connection with the Yuma project, Arizona, approved January 25, 1917, or as modifying the terms of the contract of October 23, 1918, between the United States and the Imperial irrigation district.

Mr. HAYDEN. You will note that on page 2, line 14, to comply with Dr. Elwood Mead's idea, I have inserted this proviso:

That the Secretary of the Interior is hereby authorized to cooperate with the State land-settlement board and other public authorities of the State of California and with the soldier settlement board and other public authorities of the State of Arizona in the reclamation and settlement of lands affected by the provisions of this act.

Dr. Mead states that the Legislature of the State of California has authorized a bond issue of $10,000,000, to be ratified by the people of the State, and if that is the case, when such bonds are voted, the Secretary of the Interior can cooperate with the State land-settlement board.

Mr. BARBOUR. That is not solely for the purpose of cooperating with the Government on this soldier settlement.

Mr. HAYDEN. In Arizona the State legislature passed a soldiersettlement act, which permits cooperation with the United States, and authorized the State authorities to levy taxes to raise money to cooperate with the United States.

Hon. Mulford Winsor, of Yuma, Ariz., who appeared before this committee, stated—and I will confirm that by Mr. Davis—that there is a tract of land between the Gila and Colorado Rivers which can be irrigated from the Arizona end of the Laguna Dam. If that land could be utilized as a soldier-settlement colony, I would like to see it done.

The CHAIRMAN. What about that soldier-settlement board ?

Mr. HAYDEN. A soldier-settlement board has been created by the laws of the State of Arizona. I shall insert in the record the act of the legislature in establishing this board. (See Appendix, Exhibit A.)

The CHAIRMAN. That was recently passed on account of this war?

Mr. HAYDEN. Yes; passed by the last session of the State legislature.

Mr. WELLING. This relates to the agency that Arizona has set up to cooperate with the Federal Government on this soldier-settlement work?

Mr. HAYDEN. Yes.

Mr. SINNOTT. What do you mean by this language in section 7, that the land so sold shall be paid for in cash or on deferred payments, at the option of the purchaser, in installments of one-fifth cash and one-fifth annually until fully paid ?

Mr. HAYDEN. That is the way the original Kettner bill read.

Mr. SIN NOTT. Why give them so much as 160 acres, as you have provided on page 7? Under most of these projects the Secretary makes the unit much smaller than that.

Mr. HAYDEN. I followed the Kettner bill in that regard.
Mr. SMITH of Idaho. It reads “not more than 160 acres."

Mr. HAYDEN. Yes, “not more than.” The Secretary of the Interior might fix the acreage at less than 160 acres.

I believe that the last proviso to section 7 that the Secretary of the Interior may in his discretion offer the lands to be sold and reclaimed in cooperation with the California State Land Settlement

Board or the Arizona Soldier Settlement Board, or with any soldier settlement legislation that may be enacted by Congress will take care of the remainder of Dr. Mead's suggestion. Section 8 would compel an entryman who has not patented his land to reduce his entry to 160 acres. Mr. SMITH of Idaho. Unless he has an independent water right. Mr. HAYDEN. Yes. Section 9 gives the Secretary of the Interior authority to equitably fix the construction charges against the public lands for the cost of the canals and works mentioned in the act. Section 10 provides that the money derived from the sale of the public lands, in excess of $1.25 per acre, shall be deposited in the Treasury to the credit of the lower Colorado River project fund for the development and construction of a reservoir to provide water storage for the lands affected by the provisions of this act. Mr. SMITH of Idaho. Supposing that the reservoir should not cost anywhere near that amount? Mr. HAYDEN. There is a later provision which authorizes the Secretary to use any such supplies for further investigations of the problem of storage and flood control on the Colorado River. Section 11 provides that any irrigation district, any State, any soldier settlement board, corporation, or individual may pay their share of the cost of the canals and works in cash. If my State has any money, or the State of California has any money available for this project we should give them an opportunity to pay it into the project fund in cash. The CHAIRMAN. Referring to section 17, they ought to have time there to dispose of their excess holdings to advantage. Mr. HAYDEN. That section does not require anyone to dispose of his land. It simply provides that they can not get water until they dispose of the excess; and if one can not get water, of course, he can not afford to hold the land. The CHAIRMAN. Now, I asked Director Davis to come here to-day, and on these changes that have been suggested I would like to hear from Davis. Mr. BARBour. Let me ask you a question there, Mr. Hayden. I did not follow the bill closely all the way through, because my mind was distracted two or three times. What became of the all-American canal in your bill? Mr. HAYDEN. My bill authorizes the connection of the present irrigation system of Imperial Valley with the Laguna Dam. r. BARBour. That does away, then, with the all-American canal? Mr. HAYDEN. No; you will have to have a new canal to do that. Mr. BARBOUR. Then it would not be the present system? The present system goes through Mexico. The CHAIRMAN. It doesn’t say a word about the all-American canal. Mr. HAYDEN. By inserting the words “within the United States” would satisfy your objection. Mr. BARBOUR. I didn’t catch that. The CHAIRMAN. Your bill, though, says nothing about the allAmerican canal. Mr. HAYDEN. I wanted to briefly provide that we were going to connect the present irrigration system of the Imperial irrigation

district, in the United States, with the Laguna Dam. If the bill is amended to read “by the construction of a canal and all other necessary work within the United States,” that would make clear the intent of Congress.

The CHAIRMAN. Now, Mr. Davis, we would like to hear from you in regard to the changes suggested by the bill of Mr. Hayden, which has just been read.

STATEMENT OF MR. ARTHUR P. DAVIS, DIRECTOR OF THE

RECLAMATION SERVICE.

Mr. TAYLOR. Have you had time to study the bill pretty fully?

Mr: Davis. Yes, sir; I had it read over in my office by two or three people critically, and I have followed the reading by Mr. Hayden this morning and also have noted the principal differences from time to time as pointed out by others.

The principal difference between this bill and the other is the difference of arrangement and the incorporation of the possibility of cooperation with the land-settlement boards of California and Arizona. The provisos to that effect are merely engrafted on the bill and do not interfere with its being carried out in case such cooperation does not materialize, and it seemed to me in no way to affect the availability of the bill for use in any other way, yet makes it available for use in that way if practicable.

The limitation of the amount to 160 acres in one ownership appears to be not quite effective, and that is the only criticism I now think of on the bill. It says that not more than 160 acres shall be sold to any one purchaser under the provisions of this act. We know how easy it is to make purchases through dummies and immediately make transfer; and unless some provision is made to prevent early alienation of those acreages purchased, that would be ineffective; and if it is the desire of the committee to have such a limitation on, it would be necessary to make it more effective. Mr. HAYDEN. I copied that from the Kettner bill. The CHAIRMAN. I noticed that feature myself as we went along. Mr. TAYLOR. What is your idea about that, Mr. Davis, and how does that compare with the present law, and what is your thought about it?

Mr. Davis. The present law for the disposition of the public lands disposes of them under the Homestead Act and requires residence and cultivation, and all those things. It does, however, permit alienation after a certain period of time, and there hasn't been any considerable difficulty with that; but in this case, such of these lands as are sold in advance of the delivery of water must be sold to people that are not ready to make homes, because they can't make homes upon them in their present condition. It will take some years to complete the work.

Mr. SINNOTT. Doesn't the present law compel the landowner to sell his surplus at a price fixed by the Secretary?

Mr. Davis. Yes; but that is another matter. That is privately owned land; I have been talking about the sale of public land. I was just about to touch on that matter. The bill provides, section 8:

And any entryman who shall fail to dispose of the excess of his entry above 160 acres, in the manner provided by the law, within one year after public

notice issued by the Secretary of the Interior that the lands embraced within his entry are subject to the provisions of this act, shall render his entry subject to cancellation as to the excess above 160 acres.

Now, that is in regard to valid and subsisting entries, and, I think, is effective, but in regard to the private lands section 17, page 11, provides:

No right to the use of water for land in private ownership shall be sold under authority of this act for a tract exceeding 160 acres to any one landowner, nor shall any water be delivered to more than 160 acres in any one ownership unless, in the judgment of the Secretary of the Interior, such lands in private ownership now possess an adequate and valid water right.

That will not be effective in the reduction of those large holdings. The great trouble with the large holding usually is not that a man owns and cultivates and irrigates the large holding, because he doesn't do that as a rule. The curse of it is that they hold the land out of use, and there isn't anything in this to prevent holding land out of use indefinitely; it simply denies the delivery of water, and they don't want the delivery of water while they are holding it out of use, because they don't want to pay for it.

Mr. TAYLOR. They are just holding it for speculation? Mr. Davis. Holding it for speculation, yes. Mr. SMITH, of Idaho. Do you not apply the maintenance charges to unused lands in reclamation projects now?

Mr. Davis. We do where we can. Where the project is opened so that we can, we have public notice issued and we apply it to the lands to which we can deliver water; but where we haven't opened them and where we are delivering water on a rental basis, it can be applied by action of the Water Users' Association, and that frequently is done. .

Mr. HAYDEN. Is it your suggestion, Mr. Davis, to amend this bill similarly to the provision in section 11 of the Smith-Chamberlain bill, that any owner who holds an area in excess of the amount fixed as a farm unit must place his lands in trust with the Secretary?

Mr. DAVIS. That might be done, or a provision of this kind could be made, that any land held in a larger ownership than 160 acres should be denied the use of water just as this provides, but shall be charged for; that they will have to make the payments nevertheless, and if they have to make payments for construction, operation, and maintenance and everything else, just as though they were getting the water, it will be a pressure to sell the lands.

Mr. HAYDEN. The Smith-Chamberlain bill provides that they must place their excess above 160 acres in the hands of the Secretary of the Interior in trust.

Mr. Davis. Yes; that is also in the present law. The reclamation extension act provides that for lands newly taken into a project that shall be done, and they have to trust deed it to the Secretary or make provision satisfactory to the Secretary to sell it at a price that he fixes.

Mr. HAYDEN. We can make a similar provison here.

Mr. Davis. That can be done here, or simply add to section 17 that such lands shall nevertheless pay their proportionate charge for water and the delivery of water.

Mr. TAYLOR. That will put a crimp in them.
Mr. Davis. That will be effective, I think.

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