to all the new lands irrigated in California by the all-American canal. That seems to me to be a common-sense arrangement and no harm can come from enacting it into law. If Congress makes no such provision, it may be necessary, in case of shortage of water, for the people in the Imperial Valley to go into the State courts and obtain a decree that their lands were irrigated before other lands taken under the project and therefore they have a prior right to water. That means a long and expensive lawsuit with thousands of plaintiffs and defendants.

Mr. KIBBEY. We had 5,000 defendants in the Salt River Valley, Mr. Hayden, just because we had no such provision of law as that. Mr. THOMAS C. YAGER. Mr. Chairman, I would like to discuss with the committee, but I would like to make some preliminary remarks which will take a little while, so I would like to reserve my discussion until after Mr. Kibbey gets through, if I may be permitted to discuss that later, representing outside lands.

The CHAIRMAN. It is 12 o'clock now, so we have not time for much more this morning.

Mr. HAYDEN. Section 16 provides:

SEC. 16. That for irrigation of lands in the Republic of Mexico the Secretary of the Interior is hereby authorized and empowered to dispose of any waters which are or may become available under the terms of this act and not now or in the future necessary for irrigation of lands lying within the United States, on such terms as said Secretary may prescribe, without incurring any obligation for delivery of any specific quantity of water at any future time. conditioned upon the right being given to the United States, or its citizens, to maintain protective levees in Mexico, jointly with the Government of Mexico or property owners therein; and in the event any stored water shall be so disposed of there shall be paid to the Government of the United States, upon such terms and in such installments as the said Secretary may prescribe, such proportion of the cost of the works provided for by this act and such other sums as the Secretary of the Interior, after a public hearing at which all interested parties may appear and be heard, may determine to be fair and reasonable, and the moneys so received shall be credited, respectively, to the districts and other legal organizations contributing to the cost of the works herein provided for in the proportion to be determined by said Secretary.

Now the Secretary of State suggests in his report on this section that in line 3 the words " therein; and in the event any stored water be stricken out and the words "in Mexico; but before any such water" be inserted. It seems to me the Secretary's amendment is proper. Mr. Kibbey can now discuss the section.

Mr. KIBBEY. There has been a great deal of discussion of the Mexican rights and I don't think that I need to go into the fact that the Secretary of State's report itself shows that they have no legal or equitable rights, but there might be something with reference to the comity of nations which gave them a right. I might add that I think most of the people of the valley would prefer to have a treaty with Mexico settling our right to go in and protect from flood the waters in Mexico. We know that it is absolutely impossible to deal with the Carranza government. We know that the Department of State has attempted to deal with various governments of Mexico at different times and never got any place at all. By the passage of this bill you put us in the situation where we can absolutely deprive the Mexican lands of any water at certain seasons of the year. We can take it all.

Mr. SMITH of Idaho. You mean the Secretary of the Interior could take it?

Mr. KIBBEY. Yes, sir.

Mr. HAYDEN. Let me suggest, Mr. Chairman, that the letter of the Secretary of State approving this bill be incorporated at this point in the record, because the interest of the State Department in this legislation is confined solely to this section of the bill.

The CHAIRMAN. Well, does this have any reference to Senator Smith's bill?

Mr. HAYDEN. No; that is another matter entirely.

The CHAIRMAN. It may go in.

The Hon. MOSES P. KINKAID,

House of Representatives.

DEPARTMENT OF STATE, Washington, January 17, 1920.

MY DEAR MR. KINKAID: I beg to acknowledge the receipt of your letter of January 9, 1920, with which you inclosed a copy of H. R. 11553, introduced by Mr. Kettner of California, "for the relief of the Imperial Valley, Calif., and for other purposes." On behalf of the Committee on Irrigation of Arid Lands, of which you are chairman, you request my recommendation concerning the advisability of the enactment of this measure.

In reply you are informed that I have not receded from the opinion expressed in my letter of August 20, 1919, regarding the desirability of the conclusion of a convention with Mexico respecting the equitable distribution of the waters of the Colorado River, but I recognize that the authority given to the Government of the United States by the pending bill will, perhaps, be useful in bringing about the future negotiation of such a treaty, and in any event apparently would not stand in the way of the treaty.

Under existing circumstances, therefore, and with the reservations below set forth, I am prepared to state that the pending bill appears to be unobjectionable from the standpoint of international relations.

With respect to the provisions of section 16 of the bill, relating to the authority given to the Secretary of the Interior to dispose of waters for the irrigation of lands in the Republic of Mexico, I would suggest that for the purpose of clarifying the meaning and avoiding the expressed implication that the waters to be disposed of shall be limited to those "stored," that there be substituted for the words contained in the third line on page 12 of the bill, beginning with the word "therein" and ending with the word " 'water," the following words "in Mexico; but before any such waters."

I am also of the opinion that there should be inserted in the sixth line of said page 12 of the bill, before the word "such," the word "both," thus perhaps, indicating more clearly that it is within the discretion of the Secretary of the Interior to fix separately the sums to be paid on account of a proportion of the cost of the works provided for, and such other sums as he may determine to be fair and reasonable. It may be added in this connection that I understand that the discretion thus entrusted to the Secretary of the Interior would extend to the fixing of a merely nominal sum, to apply upon the cost of the works, should he determine this to be fair and reasonable in view of the provision in section 16 of the bill that he is not to incur " any obligation for delivery of any specific quantity of water at any future time," or for any other

reason.

I am, my dear Mr. Kinkaid,

Sincerely, yours,

Mr. HAYDEN. Section 17 provides:

ROBERT LANSING.

SEC. 17. That whenever practicable preference shall be given to honorably discharged soldiers, sailors, and marines when labor is employed on any work done under authority of this act: Provided, That the rights and benefits conferred by this act shall not extend to any person who, having been drafted for military service under the provisions of the selective-service act, shall have refused to render such service or to wear the uniform of the United States.

Mr. TAYLOR. We put that clause into quite a number of different bills, and we put them in every place in the Public Lands Committee,

and I am perfectly willing, but desirous of having it go in here some place, or more than one place if necessary.

Mr. KIBBEY. In connection with that, if I may suggest, Mr. Hayden, there was another idea of putting that in, and that was to give the soldier who works upon the land, upon the works, an opportunity to get a homestead, and this work would help to provide him with means to develop the land.

Mr. SINNOTT. Shouldn't we also put in that language giving them the preference right, those who have been placed in the reserve? We haven't got that language in there.

Mr. SMITH of Idaho. They would not be in the reserve unless they had been in the service.

Mr. SINNOTT. Those that are in the reserve-there is some technicality as to whether they are discharged or not.

Mr. KIBBEY. I would rather have the language suggested by Mr. Sinnott in there, because there are in the Navy a large number of men who are not discharged, but are upon the reserve list.

Mr. HAYDEN. The next is section 18:

SEC. 18. That there is hereby authorized to be appropriated such sums as may be necessary to carry out the purposes of this act, and such sums, when appropriated by Congress, shall be deposited in the Treasury and set aside in a special fund to be known as the Laguna project fund.

Mr. KIBBEY. I think I covered that in the previous sections, and in connection with that I want to file with the committee the figures which will show that if the bonds sell at par no appropriation will be necessary. I have those figures partially prepared:

As before stated, it may be that no appropriation of moneys whatever will be necessary. Under the estimate made in the preliminary report of the Board of Engineers (see Exhibit K, p. 238 of the printed record of the first hearings on the all-American canal) the portion of cost chargeable to Imperial irrigation district is estimated to be $17,745,649 and $11,830,433 to the outside lands. The lands outside Imperial Valley which can be irrigated are estimated on page 237:

West side

East Mesa_
Remainder

Total.

Acres. 40, 000 140, 000 200,000

380, 000

The acreage estimated in Imperial district is 515,000 acres, making a total of 895,000 acres; the board finally taking 900,000 acres as a total. Director Davis estimates the total acreage which could be sold under the original Kettner bill as 170,000 acres (see part 2 of printed report at p. 276). Mr. Yager has said 155,000 acres in the Coachella Valley are irrigable (see previous printed report). The estimate of cost to be paid by the Coachella Valley is not segregated in the report, but upon a basis of acreage it is fair to assume that at least 15 per cent of the total would be assessed against them. Thus the Coachella Valley and the Imperial irrigation district can issue and sell their bonds realizing

Imperial irrigation district
Coachella water district___.

Total

$17,745, 649 3,844, 890 21, 590, 539

On page 241 of the report of the hearings we find the estimated cost of the canal completed to Mesa Canal Station No. 2 to be $23,259,223, but these figures include the cost of two permanent power plants-do not include, however, the cost of the temporary power plant estimated at $1 886,690 of which $1,132,014 is the portion to be paid under the bill, the remainder being chargeable to the Yuma project. By figuring the difference and deducting the portions to be charged to the Yuma project under contract with the Imperial

irrigation district, we find that the total cost of construcing the canal to the point where the water will be made available for the east side mesa lands (that is, mesa canal No. 2), $21,580,703. Thus, Imperial and Coachella districts would sell bonds to cover their portion of the cost of the canal which would realize $8,836 more than enough to bring the water to the point where it would be available for the east mesa. The east mesa could then be formed into district and sell bonds to net 15 per cent, or $3,844,890, making a total of $4,738,490 on hand to complete the construction of the canal, which, eliminating storage plants, would be $3,473,379, leaving a balance of $371,511. The remaining lands would then sell their bonds for sufficient to complete the cost of storage plants, etc. If the board's figures are too low the same proportion could be carried out. Storage would not necessarily be required until all districts had been formed. and if Coachella and Imperial districts had been assessed for storage this money could be used until the east mesa lands had been opened for settlement. Thus it will be seen that if the bonds sell, and we have every reason to believe they would, no appropriation whatever would be necessary by Congress. No one has been injured by this process, as each district would only pay the portion of costs assessed against it. At the time of issuing bonds for the construction the new districts would at the same time issue bonds for construction of laterals or make such arrangements as were agreeable for such construction. If the organized districts should not pay their portion of storage cost at once there might be a short period of time necessary for the east side mesa to have in which to organize and sell its bonds, which would either postpone the work for a time or make a small appropriation necessary.

Mr. SINNOTT. What will be the maximum appropriation necessary under any contingency?

Mr. KIBBEY. Why, it would be very small. I can't say the maximum appropriation would come some two or three years from now. After the practical completion of the canals to the mesa lands they could be included in an irrigation district, and there might be a possibility that more money was needed to carry it until their bonds could be issued and sold.

Mr. SINNOTT. What would that maximum be-the maximum that possibly could be demanded of the Government?

in

Mr. KIBBEY. I could not say.

Mr. SINNOTT. Would it be $100,000?

Mr. KIBBEY. I would assume approximately that.

Mr. SINNOTT. Not more?

Mr. KIBBEY. I don't think it would be.

Mr. HAYDEN. Section 19 reads:

SEC. 19. That nothing in this act contained shall be construed as in any way amending or affecting the act to provide for an auxiliary reclamation project connection with the Yuma project, Arizona, approved January 25, 1917, or as modifying the terms of the contract of October 23, 1918, between the United States and the Imperial irrigation district, and the construction charge per acre as heretofore fixed by the Secretary of the Interior for the lands of the Yuma reclamation project shall be proportionately reduced by the sums to be paid by the Imperial irrigation district for the right to use the Laguna Dam, as provided in section 9 of said contract.

The first reference is to the Yuma auxiliary project. While I have some doubt as to the necessity of specifically mentioning the act of January 25, 1917, but inasmuch as it is a special act of Congress and the water supply is obtained from the same source, there can be no harm in making it perfectly clear that act is not repealed.

The CHAIRMAN. What was that act, just briefly?"

Mr. HAYDEN. It authorized the Secretary of the Interior to set aside certain lands on the Yuma-Mesa and appraise the value thereof, estimate the cost of the construction of the necessary irrigation works

to reclaim them, and to sell the lands for cash, to raise the money whereby to construct the necessary irrigation works.

The CHAIRMAN. Those are the lands you have just been selling?

Mr. HAYDEN. One unit of the project, about 6,000 acres, has been offered for sale at a minimum price of $225 per acre, and practically all of it has been sold. The sales will be continued from week to week until this unit is all sold.

Mr. SMITH of Idaho. What sort of prices did they get for them? Mr. HAYDEN. Everybody must pay the minimum of $225 per acre, and some parties bid above that, as high as $300 an acre for choice tracts. They must pay 10 per cent down at the time of making the bid, 15 per cent when they are notified that their bid has been accepted, and then payments of 25 per cent each for the succeeding three years. I understand it is the intention of the people who have purchased lands in this unit to organize an irrigation district, issue their bonds and turn the cash into the project fund so as to hasten the construction as planned.

The last part of section 19 directs that the

construction charge per acre as heretofore fixed by the Secretary of the Interior for the lands of the Yuma reclamation project shall be proportionately reduced by the sums to be paid by the Imperial irrigation district for the right to use the Laguna Dam, as provided in section 9 of said contract.

In the contract between the Secretary of the Interior and the Imperial irrigation district there is a provision to this effect:

SEC. 9. For the right to use the Laguna Dam, the main canal and appurtenant structures, and divert water, as herein provided, the district agrees to pay to the United States the sum of $1,600,000 in 20 installments, the first of which shall become due and payable December 31, 1919, and subsequent installments annually thereafter.

It was understood at the time that this contract was made that the Secretary of the Interior had authority to credit the people of the Yuma project with the sum of $1,600,000, they being now charged with the full cost of the Laguna Dam. But the Secretary of the Interior submitted the matter to the Attorney General, who held that under existing law such credit could not be given to the water users under the Yuma project. Secretary Lane has written me a letter to that effect under date of October 2, 1919:

MY DEAR MR. HAYDEN: Such a controversy arose in the department as to our right to credit to the Yuma reclamation project any moneys received from the Imperial irrigation district for the privilege of connecting with and using the Laguna Dam that I referred the matter to the Attorney General for the United States for opinion. I am now in receipt of his opinion dated September 16, 1919, copy inclosed, wherein he holds that under the law this credit can not be allowed.

I am of the opinion that Congress should authorize the receipts from the Imperial irrigation district or other districts for use of the dam to be applied as a reduction of the charges assessed against the Yuma project. I recommend that such legislation be enacted.

So this provision in section 19 is in conformity with the Secretary's recommendation.

The CHAIRMAN. Who advises that?

Mr. HAYDEN. Franklin K. Lane, Secretary of the Interior.

Mr. WELLING. When he refers to this contract of October 23, 1918, between the United States and the Imperial irrigation district, that is not a valid contract. That is not in force and effect.