Mr. TALLMAN. Of course it would.

Mr. TAYLOR. And there is no reason why they should conflict?
Mr. LITTLE. When was this last contract made?

Mr. TALLMAN. It was made a long time before it was finally ratified by the district. I find it dated the 21st day of October, 1918. I don't know when the district finally ratified.

Mr. ROSE. The 11th of December, 1918, was the first draft; and then it went on and was finally ratified in the fall.

Mr. SINNOTT. Did Mr. Rose's plan contemplate the smaller canal? Mr. LITTLE. That applied to 1919?

Mr. SINNOTT. Did his plans contemplate a smaller canal?

Mr. TALLMAN. Well, possibly-yes; it naturally would be, because it did not contemplate the irrigation of so much land. Of course, those plans for that canal were to be submitted and accepted by the department.

Mr. LITTLE. May I ask a question there? There was a bill presented here by Mr. Kettner, I believe, for the Government to sort of O. K. a $50,000,000 bond issue. Was that in furtherance of the Imperial Valley Irrigation Co.'s contract with you? Were they

the people that were to get the authority to issue that $50,000,000 worth of bonds, the Imperial Valley people, or was it the Laguna people?

Mr. TALLMAN. The bill, as I recall, was one to authorize the Secretary of the Interior to take the bonds of various irrigation districts that would be formed, and if they found them satisfactory they would be deposited in the Treasury, on the basis of which the Treasury was to furnish funds to the extent of $50,000,000.

Mr. LITTLE. Who were they to furnish them to; the Laguna project or the last contract?

Mr. TALLMAN. None of them under that. That was a different scheme to finance this whole proposition. It might or might not be consistent with these various contracts we have told aboutthat we have referred to.

Mr. WELLING. Mr. Tallman, how long was it after the Rose contract was perfected and signed by the Secretary of the Interior that the Imperial irrigation district obtained their contract with the Secretary?

Mr. TALLMAN. Well, the Rose contract was signed in July, 1918. Mr. GATES. July 6, 1917.

Mr. TALLMAN. În 1917, and this other contract they did not finally get together on until the fall of 1918.

Mr. WELLING. One year later.

Mr. GATES. It was not ratified by the vote of the district until January, 1919.

Mr. TALLMAN. I think the Imperial district, though, had delegations up here pretty shortly after your contract.

Mr. ROSE. They got their contract December 11, after I signed mine July 6.

Mr. SINNOTT. I have been called out for a few minutes. When you were advocating this Imperial Valley bill I don't recall whether or not you were seeking any protection then for your company?

Mr. ROSE. We did not need it. The contract provided for the selling of that land and applying not less than $10 an acre for

anybody who came and bid. That did not interfere with us, because it would have allowed us to bid against anybody else for a little piece of land and would have allowed us to construct our system. But under the new bill it is different. We have argued all the time that that land should be sold to the highest bidder, and under the original Kettner bill it could have been sold.

Mr. LITTLE. Do I understand that if the original Kettner bill went through, you did not ask any favors of anybody?

Mr. Rose. Absolutely, I would have taken my chances with anybody, but class legislation came in and shut me out, and I feel differently about it now.

Mr. SINNOTT. Now did Mr. Rose's plan contemplate a smaller canal?

Mr. TALLMAN. Naturally it would be smaller, because it would not have to provide for this supply at all [indicating].

Now you asked me about this contract with the district. It has a number of provisions in it different from the Rose contract. There is a chance to develop power here and somewhere along about here [indicating], and that power development is all provided for in that contract. That contract provided for a joint development, each to furnish part of the money, and they were to get joint benefits from that power development. The Government had primarily in mind the use of the power development for pumping operations over on its new project known as the Yuma-Mesa over here [indicating], which has just been recently sold.

Mr. LITTLE. You reserved the right for the Government to use that power, didn't you?

Mr. ROSE. Part of it.

Mr. TALLMAN. Yes; part of it. It provided for the use of what they needed over here for these pumping operations.

Mr. WELLING. Are the Yuma-Mesa lands comparable in their value to the East Mesa lands in the Imperial Valley?

Mr. TALLMAN. I am unable to speak from personal knowledge. I think they are about the same.

Mr. WELLING. What did the Yuma-Mesa lands bring?

Mr. TALLMAN. The minimum price for the land and the water contract, I believe, was $225 an acre. I am told they have just recently been offered for sale and a large part of them have been disposed of on that basis. They paid 10 per cent down, I believe. Mr. FINNEY. Part of them brought more than that.

Mr. TALLMAN. I say the minimum price was $225.

Mr. WELLING. Now those lands to-day, that sold at that price, are high and dry and above every available source of water unless it is pumped.

Mr. TALLMAN. Yes.

Mr. WELLING. Now if the East Mesa land were sold under a similar contract, wouldn't it bring enough money for the Government to go ahead and build this all-American canal itself?

Mr. TALLMAN. I think so.

Mr. LITTLE. Well, for heaven's sake, why don't they do it?

Mr. TAYLOR. Because we have got a lot of knockers over there in the House all the time, and we can't do anything practical and sensible.

Mr. TALLMAN. The Rose contract in effect contemplated the same thing. Under the law we could require more for the land, but the charge is made for the water contract, and it gets the same place. The Rose contract contemplates the financing of the proposition on the land itself.

Mr. WELLING. I want to get that straight, Mr. Tallman. If the East Mesa lands were sold to-day under the same terms that the Yuma-Mesa lands were sold a year or two ago-two or three months ago-would the returns from the sale of those lands, plus whatever rights the Imperial irrigation district received in the improvement of their water system, be sufficient money to finance this whole scheme?

Mr. TALLMAN. Well, that is an engineering problem. I think it would, Mr. Welling. You have got here some 200,000 acres. You would not have to sell it for as much as they sold that. Suppose you sell it at $100 an acre flat.

Mr. WELLING. That is $20,000,000.

Mr. TALLMAN. There is $20,000,000.

The CHAIRMAN. You mean $100 without water right or with? Mr. TALLMAN. With the water right-as a minimum price. I understand there is altogether under this large high-line canal scheme-how many acres of Government land?

Mr. ROSE. There are about 400,000 acres of Government land where the title still remains in the Government, but about 250,000 acres unentered public land subject to sale.

Mr. TALLMAN. Two hundred and fifty thousand acres unentered public land?

Mr. ROSE. Yes.

Mr. TALLMAN. And there is a lot of other land entered that would have to carry its part of the burden under any scheme devised.

Mr. ROSE. Yes; there is about 500,000 acres outside, and about half of it would have to bear the burden.

Mr. WELLING. Are you familiar, Mr. Tallman, with the terms of the so-called Smith bill, 12013?

Mr. TALLMAN. I have read it, Mr. Welling.

Mr. WELLING. Does that contemplate the development of that area under a plan similar to what you have outlined for the sale of these lands?

Mr. TALLMAN. In some respects; in other respects not. It is similar in that it seeks to finance it out of the land in advance. It is different in that the Government has absolute control of all construction-in fact, it does the construction with the money which it gets. Mr. WELLING. Is the Government going to do the construction work on the lift of the Yuma-Mesa project?

Mr. TALLMAN. Yes. You asked me, though, if it was different, did you not, from these contracts?

Mr. WELLING. Oh, no.

Mr. TALLMAN. You want to know if the Smith bill was the same as the Yuma-Mesa?

Mr. WELLING. Yes.

Mr. TALLMAN. The principle is very much the same; yes.

Mr. WELLING. What is the objection to proceeding on the theory, then, of selling the lands and allowing the receipts from the sale of lands to finance the project itself?

Mr. TALLMAN. That is a question of policy, of what you want to accomplish. This matter of financing these projects out of the lands themselves, where so much money is required as is required in these projects, means disposing of the lands to people who have money. It is a business proposition purely, without any reference to the question of who will make the best settlement, without any reference to affording a home to the man who hasn't one or giving an opportunity to the man who has no means to work out a home with his hands. Now, the question is, what do we desire to accomplish most? Over here on the Yuma-Mesa nobody without money need come. Mr. WELLING. Well, is the Government getting any undesirable settlers on the Yuma-Mesa project?

Mr. TALLMAN. I don't say that it is. It is not getting any settlers at all, necessarily. It is getting people who buy the land and are willing to pay for it, of course, with the purpose of using it. Immediately they get title they can do anything with it they please.

Mr. WELLING. You don't know how that is working out as to its benefit to the people? Are land hogs getting in there and getting that land?

Mr. TALLMAN. Well, the only limitation, I think, was in acreage that any one person could get.

Mr. WELLING. Isn't it a fact that it is limited so that one man can't get more than 40 acres on the Yuma-Mesa project?

Mr. TALLMAN. I believe so, generally.

Mr. WELLING. If that is true, wouldn't it provide for a proper distribution of the lands among a great number of people?

Mr. TALLMAN. Well, in the first instance, there would be a distribution among people who have means to buy.

Mr. LITTLE. Suppose you split it up, how many people could you put in there? In other words, how many poor people would it help? Mr. EVANS. The lessors have an opportunity there, Mr. Tallman. Mr. TALLMAN. Oh, yes.

Mr. LITTLE. At 40 acres apiece, the whole thing would give 5,000 people 40 acres apiece, if it is all redeemable, but 5,000 people is a very small part of the people who need that land. It would not help the rest of them any.

Mr. EVANS. You will find the lessors and people not owning the land working there and all around, busy.

Mr. TALLMAN. Undoubtedly, in my judgment, the best way from the Government standpoint to build that whole scheme would be for the Government simply to provide the funds and turn it into the reclamation fund, with the idea of getting real settlers on every acre of land under the homestead law. I understand that is practically out of the question at the present time. That being out of the question, the next question is, are we so anxious to see that development go on as to lay aside any question of home building but simply look to the main end of getting the money to build the project and trust to the general outcome to work out a development which we desire? Mr. WELLING. If you were willing to take that chance, you think the project can be financed without a cent of Government money?

Mr. TALLMAN. I believe it could be; yes, sir. That is on the assumption, of course, that you are able to enter into a proper contract with the Imperial Irrigation District to carry their part of the burden for the additional water they want, and this district up here,

the Coachella Valley, the same way, so that all those interests will be combined, making one big unit project.

Mr. WELLING. Even if the Yuma district, the Imperial district, and the Coachella Valley, didn't want to come in, the project could be built by the proceeds from the sale of the east mesa lands, themselves could it not?

Mr. TALLMAN. I think it could, but it is necessary to bring in the district. This diversion situation, as I understand it, down here, is absolutely impossible. It has got to be taken care of.

Mr. LITTLE. You referred then to the districts through Mexico? Mr. TALLMAN. Yes; and I referred to the physical conditions of trying to divert water at this point here [indicating].

Mr. LITTLE. That is where the Imperial Valley now gets its water?

Mr. TALLMAN. Yes.

Mr. WELLING. There isn't any doubt in the world, then, but what the Imperial Irrigation District would want to come into the project, is there?

Mr. TALLMAN. I have no doubt about that.

Mr. LITTLE. Mr. Tallman, do I understand that this could be handled as Mr. Welling's question suggests, if the sales are restricted to 160 acres to each individual?

Mr. TALLMAN. I think it could; yes.

Mr. LITTLE. Suppose they said 30 acres?

Mr. TALLMAN. I think it could.

Mr. LITTLE. How about 40 acres?

Mr. TALLMAN. It had better be 80.

Mr. WELLING. You don't know of any undue or illegitimate speculation in land on the Yuma-Mesa project, thus far, Mr. Tallman?

Mr. TALLMAN. No; they haven't had an opportunity. There would not be much, because they are paying what it is worth. They are putting a lot of money into it, and they must be men who mean to make a good development. They can't do much speculating now on that dry land.

Mr. WELLING. You don't know whether they are bona fide residents of that district around the present Yuma project or not? Mr. TALLMAN. I don't think they have to be.

Mr. WELLING. Well, of course they don't have to be under the terms of the law; but you have no knowledge of the general character · of the purchasers that have applied for those lands?

Mr. TALLMAN. No; I think they are from all over.

Mr. FINNEY. I know, as a matter of fact, quite a number of them are from the State of Arizona; but there are others, as Mr. Tallman says, from all over the country.

Mr. WELLING. What will the annual water charge be on that YumaMesa project, Mr. Tallman?

Mr. TALLMAN. I am not familiar with the details of that project. Mr. WELLING. Well, it would be, at any rate, two or three times

Mr. TALLMAN (interposing). It would be pretty high, because they have got a pumping charge here. There is a rise of about 80 feet. Mr. WELLING. It would be two or three times as high as this mesa charge on account of the 80-foot rise, would it not?