to take the same attitude with respect to giving public credit to an irrigation enterprise that a private banker would. Mr. SHAW. We appreciate that and are prepared to answer that question. The credit which we propose you extend to us is to be used for the explicit purpose of remedying the objection pointed out by the Farm Loan Board, namely, make our water supply secure. Mr. KETTNER. The United States Government has spent something over $100,000,000 in aid of reclamation projects, but here are people who have developed their own reclamation project by putting in their own time and money, and they are producing almost as much as all of the Government projects put together. Now, Congress in its wisdom gave to those people their money for 20 years without interest, and if you will give these people the interest on that they will get along. Congress gave other people on reclamation projects money for 20 years, and the Imperial Valley has had absolutely nothing, with the exception of $1,000,000 at the time of the Colorado River flood. I can go further and show that the Department of Agriculture, when the Imperial Valley district was opened, issued a report that the land or soil was so fine that it would not raise anything. We have been handicapped by the Government from the start. You will see here both sides. That interest alone would do all of this work. Mr. HAYDEN. I am anticipating questions that are bound to be asked before we get through, and I want to get the answers into the record. Mr. KETTNER. These people are producing and bringing into existence greater wealth than all these other projects, and you have helped all of the others. Mr. SMITH. What is the value of the crops? Mr. KETTNER. They were worth $40,000,000 last year. Mr. ROSE. About $26,000,000 is the assessed valuation of the irrigation district, which does not include the personal property. The assessed valuation, including personal property, is $35,000,000. Of course, we assess only about one-third of the actual value. In other words, lands valued at from $150 to $300 per acre are assessed at $50 per acre. That is probably less than one-third of their actual value. Mr. KETTNER. Having helped all these other irrigation projects to the extent of giving them money for 20 years without interest, can Congress with a clear conscience refuse to help these people who have been helping themselves? Mr. LITTLE. Is it a fact that after you have hitched your system onto the Laguna Dam your water supply would be so high that the Federal Land Bank Board would lend you money? Mr. SHAW. Yes, sir; if it were not for another problem. I would like to yield now to Mr. Rose, who will touch on other problems I have not discussed. Mr. LITTLE. Would your whole proposition be solved? Mr. SHAW. That would only be solving the matter of diversion of water from the river. Mr. LITTLE. There is this practical question, that if you have not a project on which the Federal land bank people can afford to lend money on, I do not see how you could expect to get it elsewhere. Mr. SHAW. We hope to bring out the point that this bill contemplates overcoming all of our difficulties. Mr. SMITH. If this plan was carried out, would you have a safe and conservative project? Mr. SHAW. Yes, sir. STATEMENT OF MR. MARK ROSE, OF IMPERIAL VALLEY, CALIF. Mr. ROSE. Mr. Chairman, we are operating here to-day by returning that water from a foreign country. The $6,000,000 that it would cost the Imperial Valley to build that dam would not add one cent to our security, because the people down here in Mexico [indicating] are in a position to take every drop of water after we have paid the $6,000,000 for connecting with the dam. That would enable them to take more water than they are taking to-day, because it would give them a higher diversion. That does not add one cent to the value of our security and it gives only the temporary prospect of getting water from this river. We asked to pay $6,000,000 for a canal to make this connection [indicating] and $1,600,000 for the privilege of using the Laguna Dam. That connection would cost $6,000,000, plus $1,600,000; that would be the cost of the connection with the Laguna Dam. We would receive very little benefit ourselves from that, and the land barons south of the line would receive the greatest benefit while they would not be paying one dollar; they would be in a position to take every drop of our water that they wanted to take, because it would pass from our physical and legal control. The CHAIRMAN. The cost of that connection would be $6,000,000? Mr. ROSE. That would be the cost of the connection from that point. [indicating] with the present system, and it would do away with our heading up here [indicating]. Under our contract with the Interior Department we are to pay $1,600,000 for the privilege of making the connection with the Laguna Dam,, making a total of $7,600,000 which would be required of the Imperial Valley district, and it would not add one cent to our security. Mr. WELLING. It would simply give you a safe diversion? Mr. Rose. It would give the men south of the line a safe diversion, and the time is coming very rapidly when there will not be enough water, because the water in the canal passes from our legal and physical control. Mr. HAYDEN. What is the situation with respect to the contract that you have had with the Mexican Government, or with the owners of Mexican lands, which gives them the right to take all the water they want, leaving you the remainder? Mr. ROSE. There is a Mexican company, which holds a contract or concession from the Mexican Government to carry that_water through Mexico under an arrangement which provides that Mexican land can take 50 per cent of the water. They do not do that now, but if they wanted to take 100 per cent of it, we could have no way of stopping them. Mr. HAYDEN. Why have they not taken 50 per cent of it? Mr. ROSE. Because they have not reached that point in their development. They have taken as high as 331 per cent. 185833-20--3 Mr. HAYDEN. You mean that they have not cleared and leveled enough land to require it? Mr. ROSE. Yes, sir; but they have brush heap fires burning over there all the time, with Japanese and Chinese laborers at work in every direction. The only reason they have not taken all of it is because they have not the land prepared for use. They are improving it rapidly, however, and as they improve it they take what water they want. Mr. HAYDEN. Under that contract, the Mexican lands have the right to take 50 per cent of the water diverted out of the Colorado River, and then you say that if they took 100 per cent of it, you would have no recourse. What do they pay for the water that they use? Mr. ROSE. They are supposed to pay 50 cents per acre-foot, but the Government takes 20 cents per acre-foot for the right to deliver the water. The real fact is that they do not pay us. That Mexican company is a purely Mexican company, and we have no rights as American citizens down there. The arrangement is between a Mexican company and the Mexican Government, and we can do nothing but go into Mexican courts to defend our rights. The CHAIRMAN. You think there would not be enough water eventually if development should occur in Mexico? If this development should occur in Mexico, then there would not be enough water to supply all? Mr. ROSE. No, sir. The CHAIRMAN. How does that compare with the statement made here that there would be enough for 6,000,000 acres? That has been stated here. Mr. ROSE. That is the difference between the natural flow and the flow which could be conserved, but there would be required from fifty to one hundred million dollars for the storage to get those 6,000,000 acres in. Of course, we have an inherent right to irrigate our lands, being Americans, and that water falling on American soil, we have a legal right to divert it, but we do not want to have it used to serve a million acres in Mexico that belong to as many men as I have fingers. Mr. LITTLE. How far is the present outtake from the line? Mr. ROSE. That present outtake is about 7,000 feet, but we moved it up 6,000 feet from where it formerly was. We have always diverted water in our own country. Mr. LITTLE. What is the reason you can not bring that water in without going into Mexico? Mr. ROSE. The crest of our dam here [indicating] is 102 feet- Mr. ROSE. Yes, sir. Our water surface here [indicating] is 160 feet. It is a rather high country. We would get the benefit of that diversion, and this canal would be more than 30 feet above the water surface when it got down there [indicating]; so we would have the benefit of that 30 feet coming on through. In other words, by carrying the water around here [indicating] we get that benefit. That raises the water at the boundary line 34 feet above sea level, and we would be able with this canal to deliver it 136 feet above sea level. Mr. WELLING. A difference of 104 feet. Mr. Rose. A difference of 104 feet. The CHAIRMAN. You would thereby reclaim a larger area than could be reclaimed in any other way. Mr. ROSE. Yes; it would reclaim some 400,000 acres of land where the title yet remains in the Government. Some of it is entered and some of it is unentered. Mr. LITTLE. How much could be reached with your present dam? Mr. ROSE. Practically none of that outside land. This is the higher land around the valley. You Mr. WELLING. It would not be practicable at all to build from your present diversion heading an all-American canal? Mr. ROSE. No, sir; that would be absolutely impossible. Mr. LITTLE. Then what is your answer to the problem? have shown that it would not help you to spend the $7,500,000. Mr. ROSE. Our answer is to build a canal on entirely American soil which would put the water back under our own courts and under the protection of American laws. Mr. LITTLE. That is what this bill provides. Mr. ROSE. Yes, sir. Mr. LITTLE. And I asked you whether if this bill passed you would be able to offer a good, bankable security. Mr. ROSE. Yes; absolutely. Mr. KETTNER. He misunderstood you, Mr. Little. He thought you were referring to the $7,500,000. Mr. HAYDEN. Did the report of the Federal land bank, in addition to objecting on account of the fact that you could not control your water supply in Mexico, also submit as an adverse recommendation on account of the danger of a break in the levee along the Colorado River in Mexico? Mr. ROSE. Those were the two grounds; yes, sir. Mr. HAYDEN. Which did they lay the most stress upon? Mr. Rose. I judge the water question, because that is the one that we, who are familiar with the situation, lay the most stress on. Mr. HAYDEN. That brings us to a very interesting situation. What year did the Colorado River break into the Salton Sea? Mr. ROSE. The Colorado River was turned in in 1904 or 1905 by the California Development Co. It never broke in. Mr. SMITH. What is that? Mr. Rose. It was turned in by the California Development Co. They cut the bank and let it in. Mr. SMITH. What was their idea in doing that? Mr. ROSE. Because they had no money to remove the silt from their original intake and opened up a gap on the American side and it silted up, and the farmers there had no money to do any considerable work with, so they came over here in Mexico and took a team and a few scrapers and cut the levee and turned it in and forgot to close it up. Mr. SMITH. With what object in view? Mr. ROSE. To get water for the farms down here in Imperial Valley. It had silted up at the upper end of the canal and they had no money to amount to anything to clean out the canal and they just turned the river in. Mr. HAYDEN. How long did the river run into the Salton Sea? Mr. ROSE. I think about 12 months. Mr. HAYDEN. How much did it cost to stop it from running in there? Mr. ROSE. The Southern Pacific finally stopped it and I think they claim they spent something like $1,250,000. Mr. HAYDEN. And how much has been spent since by the United States toward controlling the river in Mexico? Mr. ROSE. The United States have never spent any money in stopping it. They built this Ockerson Levee down here, and the first time we had a little raise in the river it cut its way down through the Bee River here and continued on down here [indicating] through Volcano Lake and that lowered the river all the way back and consequently the Ockerson Levee mostly never saw any water and probably never will. Mr. SMITH. What losses did the settlers sustain by reason of that overflow? Mr. Rose. It would be utterly impossible for me to answer that question, but it amounted to millions of dollars. In many instances, in fact, they lost all they had, while some suffered a loss of part of their crops and some a total loss. Mr. SMITH. Is the Salton Sea back to its former height? Mr. SMITH. What losses did the settlers sustain by reason of that time. It is sinking about 8 feet a year. The CHAIRMAN. And that backs the water over considerable areas. Mr. ROSE. At first the overflow spread out over quite an area, but now New River channel has been cut out by that flood from the Salton Sea back into Mexico which is large enough to carry the entire Colorado River and to-day if the river should come in it would not overflow any of the lands on the American side of the line. It would simply run down the New River and possibly shut off our water supply until the Colorado River sunk down to eight or ten thousand feet which could be very easily stopped. There is no danger of any great destructions in the Imperial Valley from the Colorado River. In other words, gentlemen, in 1914, 1915, 1916, 1917, and 1918, since the district has been operating, we have spent $889,000 building protection works and we have, from practically nothing when we started, built a splendid protection works on the Mexican side at a cost of approximately $150,000. Mr. HAYDEN. You have been permitted to gò into old Mexico and spend this $850,000? Mr. ROSE. Yes; by paying heavy duties to go in there. Mr. HAYDEN. Suppose we should have to meet this interesting situation. This bill is passed and it is determined to build an allAmerican canal. The construction of that canal means that the people of Imperial Valley are going to have physical control of the water. Naturally that would raise some alarm in Mexico as to whether they are going to have all the rights to water which they had previously enjoyed. Suppose the Mexicans, under such circumstances as a matter of reprisal, would prevent you from maintaining an adequate levee system in Mexico. Suppose they went that far, would not your credit be injured by that fact? Mr. ROSE. Here is probably what would happen. It would take several years to construct an all-American canal, probably three years, and during that time we could go down there and spend four |