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.

Mr. 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.

Mr. WELLING. If you adopt a plan to tax these men on their unused. lands, don't that practically-it surely will compel them to sell, and doesn't it amount practically to confiscating their land? They will have to sell, no matter whether they can sell at a reasonable price or not. They can't stand the charges and they will be compelled to sell. Mr. DAVIS. I think in the long run that is true. The pressure is not quite so hard as you might think, because if they make the payments on the construction charges, that goes to the value of the land, and the buyer of the land knows that he has to pay them anyway, and that adds to the value of the land in that way.

Mr. WELLING. These annual maintenance charges amount to as much as $6 per acre in the Imperial Valley and no man can stand that on a tract of land that he is not using.

Mr. ROSE. Under the irrigation district act you have a right to collect all of your expenses-make no charges whatever for water in the State of California, but collect all expenses on the land, but if it was the desire of the people within the district to do so, they could charge the man who didn't cultivate his land with part of the water for the man who did cultivate his land, and they therefore force him to cultivate. I don't think it is necessary to incorporate anything like that in the bill, though.

Mr. HAYDEN. We might get at it another way. Section 11 of the Smith-Chamberlain bill provides:

SEC. 11. That owners of land as herein provided, situated in any district, that may desire to take advantage of the provisions of this act, shall enter into an agreement with the Secretary of the Interior to sell, within a period not to exceed ten years from the completion of the works of such district, or such portion of such works as affect the irrigation, drainage, or protection of such lands, all areas of such land in excess of such maximum area as he may, in his discretion, establish for such district; such maximum area, however, not to exceed 160 acres when, in his opinion, such land is most suitable for agriculture, nor 640 acres when, in his opinion, such land is most suitable for animal husbandry; and such excess areas shall be sold in farms of such size as will, in the opinion of the Secretary of the Interior, support a family in comfort, at such prices and on such terms of payment as are provided in such agreement. This agreement shall be executed by the owners of not less than 90 per centum of the total area of all holdings within such district which exceed the limits so established by the Secretary of the Interior before such project shall be finally approved by him. Such agreement shall confer an irrevocable power of attorney upon the Secretary of the Interior to sell such land in pursuance of the terms thereof whenever he may deem it for the best interests of the project to effect such sale, and to sell any of such land remaining unsold after the expiration of such ten years at such price as it will bring at public auction. If any State or minor political subdivision thereof is the owner of any such excess area of land within such district, the representatives of such State or subdivision thereof shall, as custodians of such land, agree with the Secretary of the Interior, in so far as it may be within their power to agree, to dispose of such excess area as herein provided. The agreements provided in this section shall not apply to lands that have complete facilities for irrigation or that are completely drained or protected against overflow at the time of such agreement.

Mr. EVANS. Mr. Davis, can I ask you to point out here on page 6, section 7, where it says: "That any unentered public lands of the United States found by the Secretary of the Interior to be susceptible of successful irrigation from the canals and works, the construction of which is provided for by this act, may be offered for sale to citizens of the United States, under such rules and regulations as the said Secretary may prescribe, at the fair value thereof, which may be fixed at not less than $10 per acre plus $1.25 per acre to be paid to the local

185833-2018

United States Land Office in compliance with the requirements of the desert-land laws."

I want to have that made clear, where that $10 per acre goes to. Does that go into the Treasury of the United States?

Mr. DAVIS. Yes, sir; according to the Kettner bill, it goes into the Treasury of the United States to be held in a guaranty fund until the repayment of all these charges against the districts, and then is available for use in liquidating those charges.

Mr. EVANS. Then temporarily, it is available for the credit of that district?

Mr. DAVIS. Yes, sir.

Mr. EVANS. That district has the right to draw upon it; in fact, it is available for any necessary purpose, that $10, in addition to the $1.25?

Mr. DAVIS. Under the original Kettner bill, I think not. It is not available for anything except as a guaranty fund until these charges are all paid, and then it is a credit to them. But under the amendment as suggested by the Secretary of the Interior it may be held as a trust until he thinks there is no further need of that, and then he can use it for the construction of storage works.

Mr. EVANS. It is never diverted then from the credit of the irrigated lands, and it is not taken to improve rivers and harbors and coastal places?

Mr. DAVIS. No, sir; in both bills, both under the original bill and the amendment, it is finally credited to the benefit of the projects. Mr. HAYDEN. I want to ask Mr. Davis this question, which arises from a discussion I recently had with Mr. Smith.

The provision relative to the creation of a guaranty fund in the Kettner bill was taken from the Smith-Chamberlain bill with this difference: In the Smith-Chamberlain bill all the landowners contribute to make up the guaranty fund; the Kettner bill merely takes the proceeds from the sales of public lands and makes that money into a guaranty fund. Mr. Smith and I, in talking it over, could not see why the resources of the United States should be used as a guaranty fund for all of the lands under the project; that if there was to be such a fund it ought to be created by contributions from all the lands. It looked to us as though the United States was not only required by this bill to loan its credit to the district, but to furnish part of that credit by taking its own assets to make up a guaranty fund. Therefore I thought it best for the United States to use its own money received from the sale of public lands in the construction of storage works. If there is to be a guaranty fund, let us create it in the same manner as provided in the original Smith-Chamberlain bill; that is, let an assessment be levied on all the lands in the project to make up the fund. It did not seem right to me, and that is the reason I did not mention such a guaranty fund in my draft of the bill.

Mr. TAYLOR. What is your idea about the form as suggested by Mr. Hayden, of changing, rearranging the form of the bill and starting off and using this Hayden bill as the basis for the draft of the bill that we report-use that language in that form rather than as it is in the Kettner form?

I

Mr. DAVIS. I haven't discovered any objection to either one. think Mr. Hayden's bill is possibly a little clearer in setting forth