Mr. FINNEY. Yes; and it provides for the preference right of the State of California to 50,000 acres for soldier settlement lands to be acquired by the State, either by purchase or by an exchange of State lands.

Mr. LITTLE. Is that the bill reported by the subcommittee?

Mr. FINNEY. Yes. And also for a preference right whereby soldiers of the late war can buy lands at $1.25 an acre. Now, that came down for report, and the Secretary in another effort to get something to relieve the situation has made a favorable report on that bill with some recommendations for changes. For instance, he thought the sale of land at $1.25 an acre would lead to speculation; that they would turn around and sell them at a higher price, and he recommended that residence be required on the land. On the State proposition he recommended that an exchange of State lands should not be permitted. I want to say that yesterday, at Dr. Mead's request, I took up with him again the question of the State exchanging some other lands for these, and the Secretary said that in view of the fact that the State is to get these lands and improve them itself, that they are not to be sold, he would not have any objection to the exchange part.

Mr. TAYLOR. What do these two reports-what bearing did they have, if any, on Mr. Rose's proposition? Did that eliminate him, or ignore him, or take him into consideration, or what was his connection with it, if any?

Mr. FINNEY. They made no mention of Mr. Rose or his plan. The CHAIRMAN. How would it affect him?

Mr. TAYLOR. They just ignored him?

Mr. FINNEY. They ignored him.

Mr. TAYLOR. On what theory did they ignore him? Because he had not complied with the contract or what?

Mr. FINNEY. Under the first Kettner bill Mr. Rose and his associates, as I understand it, might have formed an irrigation district and come in under that bill and sought a contract with the Government to reclaim the lands within that particular district-the Government would deal with each district.

Mr. LITTLE. Just the same as anybody else?

Mr. FINNEY. Yes-under the Kettner bill.

Mr. LITTLE. Did the first bill give the Rose outfit privileges different from what anybody else would get?

Mr. FINNEY. No special privileges, except a general preference to soldiers to buy land.

Mr. LITTLE. That was the first bill?

Mr. FINNEY. Yes. Now, the second Kettner bill, the one you have before you now, gives a specific preference to the State to select 50,000 acres, and it gives a specific preference to the soldiers to purchase.

Mr. TAYLOR. Is that what the American Legion boys want?

Mr. FINNEY. I don't know about the legion. I presume they do, however.

So at that point came Mr. Rose with his letter to the Secretary saying that if preferences are to be given to the State and to the legion, or soldiers, that he thought he should be taken care of.

Mr. LITTLE. Do you mean he had no objection if the soldiers got the lands, but he thought that the fellows who had spent $75,000 ought to be taken care of, too?

Mr. FINNEY. Yes, sir.

Mr. LITTLE. What do you think about that?

Mr. FINNEY. Well, I don't know-personally I don't favor

ing a special preference to anyone. I am in favor, personally, of selling these lands to finance this project.

Mr. TAYLOR. You are not in favor of giving Mr. Rose a township of land here on the side?

Mr. FINNEY. I am not in favor of giving anyone any special preference. I would give soldiers a general preference right to acquire lands.

Mr. SINNOTT. Are you in favor of giving Mr. Rose's concern any consideration?

Mr. FINNEY. Yes; I feel that Mr. Rose's company has equities there that merit consideration. As has been set out here, he has been the pioneer. Under the Rose contract he made surveys and investigations, which data were filed in the department and which is available for anyone who chooses to go on and build the canal.

Mr. TAYLOR. Is it substantially beneficial?

Mr. FINNEY. That is an engineering question; but Mr. Rose asserts that it is, that his findings have been corroborated by what subsequent investigation has been made.

Mr. LITTLE. If the Rose plan went through would the Imperial Valley people be relieved of their troubles with Mexico?

Mr. FINNEY. If this plan was carried through and a canal was built of sufficient capacity to take care of the water, not only for the Rose lands but for the old Imperial Valley, they would be relieved of their embarrassments.

Mr. TAYLOR. Why hasn't he gone ahead and done it, then? Has the department stopped him?

Mr. FINNEY. When his field notes and plats of survey and investigations came up the department was not satisfied to approve the enterprise without further investigation, and the Imperial irrigation district was at our gates asking for the approval of their contract, so that a mutual agreement was entered into between the department and the Imperial irrigation district for further survey and investigation of this canal route, the district to contribute part of the expense and the reclamation fund the balance. That survey and investigation has now been made.

Mr. LITTLE. What did that cost?

Mr. FINNEY. Forty-five thousand dollars.

Mr. LITTLE. What was the necessity for that?

Mr. FINNEY. Well, the engineers and the Reclamation Service were not satisfied that the Rose survey had gone far enough, I guess; that enough borings had been made around the points of those sand hills to determine what the bottoms and sides of the canal would be like if built. Of course, I am not an engineer, and I can't enlighten you very much.

Mr. TAYLOR. If we employed another set of engineers we would probably get another and different report.

Mr. LITTLE. Your outfit thought they were better engineers than the other fellows, so they spent $45,000 more to prove it?

Mr. FINNEY. Now, the Secretary would like to see something done to relieve the situation, so he has been reporting favorably on nearly every bill that came along that looked as though it might help. I spoke to him last night, and mentioned the Smith bill to him, which provides for the sale of the lands to finance the project, and he said: "Well, I have made a report to Congress upon Mr. Kettner's measure, and Mr. Smith's bill has not been referred to me at least it hasn't reached me for report-so I have nothing to say on that; but if you and Commissioner Tallman have personal opinions, you are at perfect liberty to express them." So we have felt free to express our personal opinions. If the Smith bill comes down for report the Secretary will make some report on it. What it will be, I don't know.

The CHAIRMAN. Will you state, if you know, any reason why it would not be wise to encourage Mr. Rose and the presentatives of the opposition interests-for instance, Mr. Kibbey here made a proposition yesterday that they would be willing to refer the differences to some third party, and it would be agreeable that that should be the Secretary of the Interior, who would be fair and just, who would decide what Mr. Rose should be paid in money. Now, it being recognized that Mr. Rose has equities here, and is entitled to consideration, why would it not be wise to ask these people to get together and settle that, the Government not being liable in any way for the amount to be paid, as I understand it?

Mr. FINNEY. Assuming that the committee was going to favor this last Kettner bill, Judge, I think possibly that might be one way out of it. I don't know that the Secretary would want to act as umpire, or that he would be in favor of leaving it to one man.

The CHAIRMAN. Let them settle it themselves.

Mr. FINNEY. If they can; yes. I feel that Mr. Rose has some equities that are entitled to consideration. Of course, it would be very much better if they could get together in mutual agreement. Possibly they could select umpires themselves.

Mr. LITTLE. What do you understand to be the objection of the second delegation to the original Rose plan? It seems from what you say that Rose's people, if they went ahead and finished their plan, would relieve the Imperial Valley people of the trouble with the Mexican ditch. Now comes along another series of gentlemen and they don't want that to be done that way. Now, just what is the objection to it as you understand it?

Mr. FINNEY. Well, Judge, the Rose canal, if built for his lands alone, would not have been sufficient to help out the Imperial Valley or relieve the Mexican situation. They would have had to join to meet that the Rose interests, the old Imperial irrigation district, and any other interests, would have had to combine and build jointly this canal.

Mr. LITTLE. Wouldn't that ditch have brought enough water over to that east mesa so that they could have arranged to go on into the valley with it?

Mr. FINNEY. It could have been done very readily.

Mr. EVANS. Of all of the plans, which offers the more security to the Imperial irrigation district, the old way or the Rose way, or the more recent plan; which offers the greater security?

Mr. FINNEY. You see, nearly all of these plans contemplate taking the water out of the Laguna Dam and bringing it around onto American territory to a point in the Mesa, so it is a matter largely of financing, you see, a matter of handling the land.

Mr. EVANS. Then you think the Rose plan would have been an improvement over the old way?

Mr. FINNEY. Yes; anything would be better than the present method of water supply.

Mr. LITTLE. Isn't it unfortunate that any difference of opinion has arisen between those people down there?

Mr. FINNEY. It is very unfortunate, naturally. But I still think that the businesslike method is to utilize the assets that we have, namely, these Government lands.

Mr. WELLING. You are not in favor of giving anybody a preference right, but you do advise that we go ahead and sell those lands? Mr. FINNEY. I am not in favor of giving anyone a preference right, unless it would be a general preference to soldiers to buy at the top price?

Mr. WELLING. It would not be objectionable to give the Rose interests preference rights on a small territory of land for a month or two months or three months-whatever the term might be?

Mr. FINNEY. No; they would not ask for that, as I understand it; and I don't think anyone should have the preference if we are going to use the lands as a basis of financing the project. I think these Government lands should be put up and sold substantially on the Yuma-Mesa plan. Then the Imperial Valley and the Coachella Valley and other districts interested could supplement that, and the thing could be built jointly.

Mr. EVANS. Then the Smith bill covers your ideas?

Mr. FINNEY. Yes.

Mr. LITTLE. Why isn't the sensible thing to do to go ahead with any of these projects and get rid of the Rose outfit by agreeing that out of whatever does come out of the Treasury they will be paid whatever they should be paid? Isn't that a sensible way out of it? Mr. FINNEY. Well, that would be one way of disposing of the Rose interests.

Mr. LITTLE. Then they will have their money back and they won't have much kick coming. They will have some glory out of it, and will get their money back, and nobody else would kick.

Mr. KIBBEY. I will say, Mr. Little, that is entirely satisfactory to the Imperial Valley.

Mr. TAYLOR. That might be done, but how can we legislate to settle this matter of Mr. Rose now? How can we disregard what he says and what the other side says how can we go ahead arbitrarily and settle this, in view of the fact that he has a contract now? We really do not possess any such province, as I see it.

Mr. FINNEY. Mr. Rose's legal rights would be determined either in the department or in the courts, I think.

Mr. LITTLE. Mr. Kibbey has just said it would be satisfactory to them, and it might be arranged definitely, a definite amount which this committee, of course, would have to fix, that would go to the Rose people.

Mr. FINNEY. That would only be necessary, Judge, in the event that this particular bill was agreed upon. If the original Kettner

bill, or the Smith bill were agreed upon, I understand that Mr. Rose has no claim at all, because he thinks he could work out his own salvation.

Mr. LITTLE. Of course, if Mr. Rose gets his money back, that is about all he will get anyway. Some of them that begin things never make anything out of it, and if Mr. Rose gets his money back he will be satisfied, I suppose, fairly well. Mr. Kibbey says that they will be well satisfied. Now, why don't we go ahead and put it into the bill and quit fooling with it?

Mr. FINNEY. We might provide a monument for him, too [laughter].

Mr. LITTLE. Oh, yes-probably they will give Rose a monument for starting it-after he is dead.

Mr. SINNOTT. Mr. Finney, when you speak of Mr. Rose's equities, you mean legal equities or moral equities?

The CHAIRMAN. Contractual, you mean?

Mr. FINNEY. Well, equities arising out of the efforts he has put forth to develop that situation, and there are equities arising out of the contract which is not terminated. That contract is in a state of suspension, as it were. It was entered into-he made these preliminary investigations which the Secretary might or might not accept. The Secretary did not accept the investigations as conclusive, but entered into the second contract with the Imperial Valley and authorized the further investigation to be made. In the meantime, this Rose contract seems to be in sort of a state of suspense.

Mr. WELLING. Do you think that the Smith bill violates the provisions of the Rose contract?

Mr. FINNEY. No.

Mr. WELLING. Does it violate the conditions of the contract with the Imperial Valley Irrigation Co.?

Mr. FINNEY. No.

Mr.TALLMAN. I think it does, Mr. Finney.

Mr. WELLING. And Mr. Rose is satisfied with the Smith bill?

Mr. FINNEY. I understand so.

Mr. LITTLE. You think if we put a provision in that bill to pay Rose what he actually has invested-what his people have investeddon't you think the committee had better fix it? There is no use in fooling around about this thing. That would get rid of him forever, wouldn't it?

Mr. FINNEY. It would take care of his equities.

Mr. LITTLE. That would satisfy the other people, and that would be a mere button in the sum that will come in.

Mr. FINNEY. That will be one way out of it, assuming you want to pass this particular bill.

Mr. BARBOUR. What effect would that have on the fund, Mr. Finney, so far as having money with which to do the construction work? Mr. LITTLE. $75,000 wouldn't be very much out of all the money involved here.

Mr. BARBOUR. If you take a certain amount of this money that you get from the sale of lands and pay it to Mr. Rose, what is going to be the effect upon the funds needed to pay for the construction work? Mr. FINNEY. I understood Judge Little's proposition was not directed toward the Smith bill, but this bill here, which makes no appropriation at all.

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