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Mr. HAYDEN. It is in force and effect to-day.

Mr. WELLING. It says in the contract itself that certain moneys shall be paid in December, 1919; no money has been paid under that contract.

Mr. HAYDEN. The Secretary of the Interior has authority to extend the time of payment, or to extend the life of the contract, which undoubtedly he has done or will do.

Mr. SMITH of Idaho. Mr. Hayden, will the construction of this proposed all-American canal in any way interfere with or impair the Yuma reclamation project?

Mr. HAYDEN. It would if no mention was made in this bill of the existence of the Yuma project. Let us suppose that the Imperial irrigation district had connected its canal with the Laguna Dam and then afterwards asserted an equal or prior right to the waters of the Colorado River. There might also be a controversy as to the disposition of the sums of money that the Imperial irrigation district must pay for that privilege. I am trying to clear away all such disputes by this bill, so that there will be no doubt about what is to be done. I desire to insert in the record the letter of the Secretary of the Interior and the opinion of the Attorney General, to which I have referred.

(The papers referred to follow :)

Hon. CARL HAYDEN,

House of Representatives.

DEPARTMENT OF THE INTERIOR,
Washington, 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 State 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.

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DEAR MR. SECRETARY: I am in receipt of your letter of August 13, 1919, requesting an opinion as to whether you are authorized to credit to the Yuma reclamation project, to be applied in reduction of the construction charges heretofore assessed against the water users thereof, certain money proposed to be paid by the Imperial irrigation district for the privilege of connecting with and using the Laguna Dam and the main canal of the Yuma project for the irrigation of lands in the Imperial Valley. On my request for further information the Reclamation Service has furnished me a copy of the hearings before the Committee on Arid Lands of the House of Representatives, Sixtysixth Congress, entitled "All-American Canal in Imperial County, Calif." It appears therefrom that the money in question is to be paid under a contract, dated October 23, 1918, between the United States and the Imperial irrigation district, which is reprinted on page 245 of that pamphlet.

From the papers submitted, the contract itself, and some statements made before that committee I gather that the situation at the date of the contract was substantially as follows:

The Yuma project was then practically complete as to its main structures, comprising the Laguna Dam, which diverts water from the Colorado River; a main canal; and a levee costing some $2,600,000, which protects the project lands against overflow from the river. The dam and main canal were and are of sufficient capacity to serve adequately the lands now under irrigation and some additional lands yet to be added to complete the project as designed. A public notice had issued, as contemplated by section 4 of the reclamation act, assessing the lands of the project for the "estimated cost" of construction at the rate of $75 per acre. In the meantime investigations and surveys had disclosed that large bodies of land in the Imperial Valley and within the Imperial irrigation district can be served to great advantage by water diverted by the Laguna Dam and carried through the main canal of the Yuma project and thence through an 66 All-American "canal which the Imperial irrigation district proposed to construct and connect therewith.

The contract of October 23, 1918, above mentioned, provides for this common use of the dam and canal of the Yuma project. In addition to the $1,600,000 to be paid in money, the irrigation district undertakes to make some changes in the damn and to enlarge the main canal entirely at its own expense and with proper safeguards against any injury to the Yuma project or the lands within it. The water users of the Yuma project claim that the $1,600,000 thus to be received should be applied to the reduction of the charges assessed against their lands, their position apparently being that the cost of the levee was not a proper charge against them and was not included in the assessment, but as the cost of the dam and main canal were included, they are entitled to the compensation to be paid for the use thereof by others. The director of the Reclamation Service, while agreeing that the cost of the levee was not included in the charges as fixed, contends that the money to be received should be paid into the reclamation fund to make up in part the loss resulting from the insufficiency of the assessment to cover the cost of all the works.

In the view I feel constrained to take it is not material to the decision of the question of law involved what was or what was not included as the basis of the charges fixed by the public notice. It is apparent, in any event, that those charges will not repay the total construction costs of the Yuma project by some $2,600,000, a result not contemplated by the reclamation legislation. (Swigart v. Baker, 229 U. S., 187.)

The original act of June 17, 1902, seems to contemplate reclamation projects, each of which shall be complete in itself and served by dams, canals, and other works constructed for it alone, all the estimated costs thereof to be assessed against the irrigable lands included in the project. No provision is made and no authority is given to connect with private or other nongovernmental irrigation projects, or to furnish them with water or enter into cooperative arrangements with them. Some years of experience, however, developed the possibilities of enlarged usefulness in this direction, and Congress later made provision threfor. This was done by the act of February 21, 1911 (36 Stat., 925), entitled "An act to authorize the Government to contract for impounding, storing, and carriage of water, and to cooperate in the construction and use of reservoirs and canals under reclamation projects, and for other pur poses." This act comprises three sections, the first of which provides:

"That whenever in carrying out the provisions of the reclamation law, storage or carrying capacity has been or may be provided in excess of the requirements of the lands to be irrigated under any project, the Secretary of the Interior, preserving a first right to lands and entrymen under the project, is hereby authorized, upon such terms as he may determine to be just and equitable, to contract fo the impounding, storage, and carriage of water to an extent not exceeding such excess capacity with irrigation systems operating under the act of August 18, 1894, known as the Carey Act, and individuals, corporations, associations, and irrigation districts," etc.

This section relates to excess water, storage, and carrying capacity, and does not seem to be strictly applicable to the arrangement now in question. Section 2, however, provides:

"That in carrying out the provisions of said reclamation act and acts amendatory thereof or supplementary thereto the Secretary of the Interior is authorized, upon such terms as may be agreed upon, to cooperate with irrigation districts, water users' associations, corporations, entrymen, or water users

for the construction or use of such reservoirs, canals, or ditches as may be advantageously used by the Government and irrigation districts, water users' associations, corporations, entrymen, or water users for impounding, delivering, and carrying water for irrigation purposes."

* * *

This section authorized cooperation not only for a common use of existing works, but also for the enlargement thereof to facilitate and make possible a common use. The act was in force when the present contract was entered into and clearly and specifically covers such an arrangement. I am of opinion, therefore, that the legal foundation and authority for the contract in question must be sought in this legislation.

This being true, the question of the disposition of the moneys to be received under the contract is specifically answered by the third section, which provides: "That the moneys received in pursuance of such contracts shall be covered. into the reclamation fund and be available for use under the terms of the reclamation act and the acts amendatory thereof or supplementary thereto."

You are accordingly advised that the money in question can not be applied. in reduction of the assessments against the lands of the Yuma project, but must be disposed of as directed by this statute.

Very respectfully,

C. B. AMES, Acting Attorney General.

The CHAIRMAN. You just leave that to the Secretary of the Interior to figure out how far he shall go and what credit the Yuma project shall have?

Mr. HAYDEN. That has already been determined by the contract of October 23, 1918, and the sum fixed for the right to connect with the Laguna Dam is $1,600,000.

The CHAIRMAN. Well, that is what they paid. Now, the get a reduction from that.

Mr. HAYDEN. The people under the Yuma project are now under contract to pay for the full cost of the Laguna Dam.

The CHAIRMAN. On the Yuma project?

Mr. HAYDEN. Yes; the Secretary of the Interior proposes to let. the Imperial irrigation district obtain the benefit of the Laguna Dam and charge them $1,600,000 for the privilege of using it. If nothing is said about it, the United States will be paid twice for that work. The full amount of its cost, which is $1,750,000, will be paid by the water users of the Yuma project, then $1,600,000 in addition will be paid by the Imperial irrigation district. If the Yuma people must pay its total cost, they should get credit for any sums the Secretary of the Interior receives from the Imperial irrigation district. for the use of the Laguna Dam.

The CHAIRMAN. Well, I mean the price that the Imperial irrigation district is to pay is not fixed.

Mr. HAYDEN. Yes; it is fixed by section 9 of the contract at $1,600,000.

The CHAIRMAN. But in the bill here, I mean.

Mr. HAYDEN. Section 19 of this bill refers specifically to section 9 of the contract which requires the payment of $1,600,000.

Mr. 'WELLING. Now, Mr. Hayden, suppose in place of putting the contract of the Secretary of the Interior with the Imperial irrigation district, you had written into the law the contract that the Secretary of the Interior made with Mr. Mark Rose for connecting up with the Laguna Dam; that contract would be in force just as much as the contract with the Imperiad irrigation district, wouldn't it?

Mr. HAYDEN. I do not understand that Mr. Mark Rose ever agreed to pay any money for such a privilege.

Mr. ROSE. We agreed to pay $950,000. We wrote that into the contract; that we were to pay $200,000 up to a certain time and the rest under certain conditions.

Mr. HAYDEN. The fact that the Secretary of the Interior has made a subsequent contract with the Imperial irrigation district, and the fact that your contract is voidable at any time the Secretary sees fit to revoke it, seems to me to make this contract with the Imperial irrigation district superior to your own.

Mr. ROSE. Well, the situation is simply this, Mr. Hayden: They made a contract at that time with the Imperial irrigation district; they submitted a contract which had a reservation in it, and the last contract they put in section 11, and that $1,600,000 is the charge for the lands and the present boundaries of Imperial irrigation district, and there is to be an additional charge to any other lands that are irrigated under this system, according to that. But the division that the engineers make is considerably less than that. They put it, I think, at about $700,000 or $800,000, at the outside $1,200,000; but the contract provides that that shall be the amount that the Imperial irrigation district shall pay, $1,600,000.

Mr. HAYDEN. Then, perhaps this bill should be amended, and instead of referring to any specific contract it should refer to "all sums."

Mr. WELLING. Now, you are getting at

Mr. HAYDEN (interposing). That Congress should authorize the receipts from the Imperial irrigation district or other districts for the use of the Laguna Dam to be applied as a reduction of the charges assessed against the water users of the Yuma project. If Mr. Rose is right in his contention, we might well amend the section to make it clear that all sums of money received from any source whatsoever for the privilege of connecting with the Laguna Dam shall be credited to the water users of the Yuma project.

Mr. ROSE. The contract with the district provides that if any other lands go in it shall be applied to storage instead of to the Yuma project, which this bill says shall not be interfered with.

Mr. HAYDEN. I want to make it perfectly clear that the water users of the Yuma project shall not be required to pay the full cost of the Laguna Dam and then have the Government sell out from under them the right to use that structure and obtain additional money. If they are to pay for it they should have credit for any money that comes in.

Mr. KIBBEY. Mr. Hayden, after the other districts pay their proportion, shouldn't they have credit for anything subsequent to that time? Suppose that Yuma and the Imperial district have come in and paid up; they jointly own that dam then; they have practically paid for it. Now, then, if Coachella should come in, just for the sake of argument, long after that time, should not that reduce the Imperial as well as the Yuma amount?

The CHAIRMAN. It ought to be in the hands, it seems to me, of the Secretary of the Interior all the time to equitably adjust all of these expenditures and make the adjustment between all the parties getting water-adjust all the benefits as well as the liabilities and to make them even clear through.

Mr. HAYDEN. I shall look into this matter very carefully. It ought to be made certain that equity can be done to all concerned and that a double payment shall not be required of anybody.

The CHAIRMAN. Yes. We expect to have Director Davis and Mr. Finney, anyhow, before we get through, and we had better direct their attention to that.

Mr. HAYDEN. I shall look into that carefully.

Section 20 provides:

SEC. 20. That the Secretary of the Interior is hereby authorized to perform any and all acts, to make rules and regulations for the disposal of the lands herein mentioned so as to assure the organization of the districts and the issuance of bonds herein provided for, to determine when water is available for the lands provided herein to be sold or disposed of, and to make such rules and regulations as in his opinion may be necessary and proper for the purpose of carrying the provisions of this act into full force and effect.

That is a general clause which is usual in bills of this character. I think, Mr. Chairman, that concludes any discussion of the items of the bill, unless Mr. Kibbey desires to make a further statement.

The CHAIRMAN. Before we adjourn, I want to make inquiry— there was some talk some time ago and I want to hear from Mr. Rose about this-how is this matter about having separate bills? I want to know if you are all together.

Mr. ROSE. The outside lands don't believe that this is a workable bill for a good many reasons. We don't believe that the Secretary or the Government can eat an apple and keep it too. One of two things should be done with the public lands out there. We know that the Government is not going to appropriate money to irrigate those lands. We have been told that generally by Congressmen and Senators. Now, there is only one other way, and that is to sell those lands and let them finance themselves. If the Government has got a large body of public lands, and it will not appropriate the money to improve it and won't sell it, the result is that that land is going to lay a desert, as it has lain for 18 years withdrawn from entry of all forms. Now, we believe that land should be sold and allowed to finance itself. That is our contention, absolutely.

Mr. THOMPSON. You mean sold as dry land?

Mr. ROSE. Yes, sir; it is just the same as Imperial Valley, if the water was available, and the Imperial Valley which is now producing $65,000,000 a year would have been a desert if it had remained in Government ownership.

There are only two plans that I can see to reclaim the public lands of this country. One is for the Government of the United States to appropriate the money and reclaim the land and then to sell them, or else the lands go into the hands of private owners who will do it.

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Now, our contention is this: The Government is not selling their lands; they are simply saying to a man, "If you will advance in five annual payments" or four-whatever the Secretary may fix-" the money that it will take to irrigate that land, we will give it to you,' because the money that you pay for it goes back to the system, and you get the system. Now, that is my contention, and I don't believe Mr. Kibbey talked about $100,000 appropriation, but their proportionate share of the public lands is probably $10,000,000,

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