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Mr. ROSE. I can answer that question, if you care to have me. have the highest irrigated area to-day under the present Imperial irrigation system, which is 30 feet above sea level. I am farming a portion of the land precisely the same as the mesa land. It is very productive, and the minute water is put on it it will grow anything. It is a red loam, not sand, except some loose sand in spots that has drifted over. The mesa is covered with brush anywhere from as high as this ceiling up to higher than my head, scattered around over it. It has a gravel covering on the surface, with occasionally now and then a streak of sand.

Mr. SINNOTT. The water does not sink away?
Mr. ROSE. No.

Mr. SINNOTT. Does a water table form there?

Mr. ROSE. No; and it is about 20 to 100 feet to water under there. And another thing: It does not require the water of the valley, because when you put water on there the roots go down 8 or 10 feet to water.

Mr. LITTLE. I thought the commissioner said that the east mesa that they are now disputing about was shifting sand territory.

Mr. TALLMAN. This was the same way [indicating Imperial Valley] before they reclaimed it.

Mr. LITTLE. Am I correct in supposing that that is an area of shifting sand?

Mr. TALLMAN. Yes.

Mr. LITTLE. And the Imperial Valley was the same way?

Mr. TALLMAN. The same thing.

Mr. LITTLE. Now, am I correct in this: That it is substantially the same as far as crop growing and irrigation is concerned as the Imperial Valley proper was before it was reclaimed?

Mr. ROSE. Excepting it is a sandy loam soil. It turns red when you put water on it.

Mr. LITTLE. I have seen the same thing done in Egypt, so it is not incredible; but I just wanted to be sure I understood you.

Mr. TALLMAN. At the time when those matters were being presented to us there were various bills pending in Congress, as there have been ever since, and numerous delegations from Imperial Valley proper, as we call this area [indicating], and Mr. Rose and his associates appeared before us from time to time. I understand you are fully advised as to the problems in the Imperial irrigation district. with respect to their bad diversion point here on the river [indicating] and their desire also to get further up and make a diversion at a more practical point.

The CHAIRMAN. That has been gone into very fully.

Mr. TALLMAN. None of those bills seemed to make much progress,. none of the various schemes for legislation seemed to have any future at that time, and the Reclamation Service did not see fit to take it up; they could not, as a matter of fact; their funds were practically exhausted and they needed all the additional funds they could get to complete existing projects, so that those considerations rather forced us to give very serious consideration to some plan or other by which private enterprise on some safe and reasonable basis could reclaim these lands by private capital. That is what led to the Rose contract.

Now, briefly we contemplated in the Rose contract that title to those lands should be acquired under the desert-land act. The desertland act authorizes a qualified entryman to take up 320 acres of land, paying 25 cents an acre down, paying $1 an acre at the time he makes final proof within four years; he must expend and show that he has expended for the reclamation of the land not less than $1 an acre per year for three years. In other words, the minimum requirement is that he must spend $3 an acre on the land and pay the Government $1.25 an acre.

Mr. SINNOTT. To show that he has irrigated it?

Mr. TALLMAN. The principal thing, of course, that he must show when he makes his final proof, is an available, permanent water supply sufficient to irrigate all the irrigable land within his entry.

Mr. LITTLE. Has most of the public land in the West been disposed of for $1.25 an acre?

Mr. TALLMAN. No; I should say most of it has been disposed of for much less than that. The great dispositions are made under the homestead law, with no charge whatever except the fees and commissions.

Mr. LITTLE. The sales of lands were mostly at $1.25 an acre, though?

Mr. TALLMAN. Yes; but most of the great cash sales were farther east.

Mr. LITTLE. But if you prove out in six months you pay $1.25.

Mr. TALLMAN. Under the homestead law-under the original homestead law-you could commute by paying $1.25 an acre. Now many of the desert-land entries which are made show for their water supply stock or interest in some irrigation company? For instance, the best example, I think, that I can give you is this portion of Imperial Valley. Practically all that land has been taken up under the desertland act. There are some homesteads, and these desert-land entrymen-for instance, a man for a desert land entry in here to-day [indicating]; he makes proof of the formal requirements, and in addition to that he shows that he owns stock in one of these companies which is a going concern, qualified to furnish him with water, and he has enough stock to furnish him sufficient water to reclaim his land, and that the land is within the boundaries at the present time of this irrigation district and has the advantage of that. Mr. SINNOTT. The stock calls for water, does it?

Mr. TALLMAN. Yes. The mutual companies are distributors; they buy from the district and take the water at these main headings. In many other cases throughout the country we have private individuals who build an irrigation project for the purpose of selling water rights to desert-land entrymen. Now, in that case we investigate that company, ascertain its title to water and the character of the structures and its ability to deliver water, and determine as best we can whether stock or water contracts in that company represent such a permanent water right for the irrigation of the land in the entry as will be acceptable. That is what we have in mind here.

Now, there is only one place to get water to irrigate this land. We conceived the notion that if we should make a contract with one outfit to connect up at the Laguna Dam, there would be no opportunity for anybody else to reclaim these lands. Then we would open the land

under the desert-land act, restore it; those entrymen would take the land, and in order to make a filing which would be acceptable they would have to show stock or water contract in some acceptable company, and we planned that this, if it went through, would be an acceptable company. Now, by reason of the fact that they desired to connect with the Laguna Dam, we considered that it gave us the right under the Warren Act to make a very effective contract with the construction company, such as would subject it to very close supervision of the Government from start to finish.

Mr. SINNOTT. That construction company was Mr. Rose's company?

Mr. TALLMAN. That was Mr. Rose's company. My thought was in that connection that we would tie him up so tight in that contract that if he went ahead at all he would have to make a success of it, and it would have to be a company which would be acceptable for the reclamation of those lands under the desert-land act.

Mr. LITTLE. At that time were there any other parties desirous of securing such a contract and taking over the opportunity?

Mr. TALLMAN. No; not seriously. The only other party to be considered in that connection was the Imperial Valley.

Briefly, that contract provided that Mr. Rose should have the right, or his company should have the right, to connect right here [Laguna Dam]. They were to pay the Government $960,000 for the right to make this connection. Now, the Government has this canal built from there down here [indicating].

Mr. ROSE (interposing). Ten miles.

Mr. TALLMAN. Ten miles down here to a point called Siphon Drop, I think it is. The idea was to enlarge that and extend it. It already has branches off here [indicating] and comes down here onto the Yuma project.

We further provided that all of his operations, all of his surveys, all of his plans and specifications by which he was going to build this project should first receive the approval of the Secretary of the Interior. He was not to make a move nor gain a single right until he had submitted plans and specifications that were satisfactory, and the first step in the contract required him to make extensive surveys and tests of the conditions existing here for the purpose of construction. Further than that, it was provided that the plans and specifications he submitted were to be accompanied with estimates of the cost, and before he went ahead the charge that he was going to make for water contracts to irrigate this land were to be fixed and subject to the approval of the Secretary. It was provided in the contract that when the land was opened to entry his company could sell water contracts. He was to collect not less than $10 per acre down, and that $10 was to go in escrow in a bank to be designated by the Secretary and remain there until he had sold 120,000 acres of water contracts and gotten the $10 down in escrow, making $1,200,000.

Mr. LITTLE. What reason had you to anticipate that he was so situated financially, he and his associates, that they could carry this out, Mr. Tallman?

Mr. TALLMAN. That plan is to finance itself, Judge. He was to sell water contracts to people who would make filings on this land to the

extent of 120,000 acres. Now, those water contracts would result in his collecting in $1,200,000, and his having outstanding contracts against those people who had made that first payment of sufficient additional money to pay the estimated cost of this whole construction. Mr. LITTLE. It sounds awfully big. Now, do you feel sure that that is a reasonable proposition or is that just dreamland?

Mr. TALLMAN. Our proposition was this, that at such a time as Mr. Rose's company had gotten the $1,200,000 in the Treasury, had paid the Government $200,000 to apply on the claim of $960,000, and had outstanding contracts for enough more money to build the project with these first payments made, that that was a pretty good start on financing the enterprise. Now, whether it was a practical thing or a dream, that was the plan that we were going to try out. Mr. TAYLOR. That was his company? Mr. TALLMAN. That was his company.

Mr. SINNOTT. That compelled him to raise enough money to finance the thing.

We

Mr. TALLMAN. Of course, there was more than 120,000 acres. put that as the limit to start with. Now, briefly, that is just what the Rose contract was.

Mr. EVANS. What has occurred since to throw any doubt upon the reasonableness of that contract entered into at that time? Is there any reason to doubt that that can not be carried on?

Mr. TALLMAN. I don't think there is. I went over that the other day and came to the conclusion that it was still a feasible scheme. Mr. EVANS. Can you conceive that there is any reason to doubt its practicability?

Mr. TALLMAN. Well, I should say in this connection that from the very first we always advised Mr. Rose and everybody in connection with this matter that the entire Imperial Valley should be developed as a unit, as it was clearly evident that to distribute the large cost over this entire area would be more economical and likely to succeed.

Every opportunity was given the Imperial irrigation district to come in and take part in that contract, or to become a party to it, and it is my recollection that at the very last minute before the Secretary signed that contract, a telegram was sent to the officers of the district asking them if they had any objection or if they wanted to come in, because we fully realized that there was going to be ultimately the necessity of the Imperial district making a new point of diversion.

Mr. LITTLE. At that time, of course, it was evident that it would cost a lot of money to survey and experiment around, and they didn't care to take the chance?

Mr. TALLMAN. Well, they came on very shortly afterwards with a delegation, and wanted to do something. They considered it imperative that they should have a new diversion point, and the Secretary then took up the matter with them and eventually that led to a contract with the Imperial irrigation district, which I find has been put in your hearings here on page 245. Perhaps you are familiar with it. Their idea and their necessities simply required. that they connect up here to come down here [indicating], and go straight down across here to connect with their existing canal sys

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tem. They were not interested in this [indicating], except as the reclamation of those lands in a unit scheme would naturally carry some of the burden of the immense cost of these works up here [indicating].

Mr. TAYLOR. Perhaps you had better tell us a little bit about what that contract was; what was its nature and extent.

Mr. TALLMAN. That contract was very much like Mr. Rose's contract in some respects-in many respects.

Mr. TAYLOR. Did it conflict with it, or supplant or supersede or revoke it, or have any effect upon the Rose contract; and if so, what? Mr. TALLMAN. Well, it gave consideration to it. In a sense it conflicted. The original contract said it was made subject to it, and paragraph 11

Mr. LITTLE (interposing). I didn't get that. Which original contract said it was made subject to what? I didn't quite follow you there.

Mr. TALLMAN. The first draft of the contract with the district. Mr. LITTLE. Oh, yes; I see.

Mr. TALLMAN. That provided that their contract was subject to the Rose contract. I think that, you said, was afterwards taken out? Mr. FINNEY. Yes; that was changed.

Mr. TALLMAN. But I find a provision in the Imperial Valley contract in section 11 which states:

That the United States reserves the right to arrange for the connection with and use of Laguna Dam on such terms as the Secretary of the Interior may deem expedient, by any other irrigation enterprise, district, corporation, or individual; also of the headworks and main canals and the other governmentally constructed works, works constructed, jointly by these parties after proper enlargement and modification on terms herein stipulated, without, however, impairing the utilization of said dam, canal, and other works to the extent necessary to irrigate the land within the boundaries of the Imperial irrigation district.

Mr. LITTLE. That would seem to reserve the right to the Laguna project, would it?

Mr. TALLMAN. Well, the situation was this: They were not necessarily inconsistent with each other; they conflicted simply to the extent of this piece of canal down here and over to here [indicating]. They both wanted to take water from here to here. Now, of course, they could not both have a separate canal in the same place, but it was perfectly simple for them to enlarge one canal so as to supply them both, and that is the only actual conflict, as I recall, on the ground between the full operation of the two contracts.

Mr. LITTLE. Right there, Mr. Commissioner, it seems to be evident that legally they could both build, but practically never but one of them, would they?

Mr. TALLMAN. As a practical matter we felt all along that necessarily if these two contracts operated separately they would be forced together by some means or other to build a single canal. Their own interest would make it absolutely necessary that they do that, because it would be prohibitive if they built it otherwise, and by throwing their funds together, of course, they could build it much more advantageously.

Mr. TAYLOR. It would be mutually beneficial to them to work together.