point where the main canal reaches the east mesa, and then if enough land is entered to permit the organization of a new irrigation district, 500 settlers are required, as you say, that there is no question but that the bond buyers would be glad to purchase bonds of the east mesa district if they knew that the Secretary of the Interior was to immediately expend the proceeds of the bonds to put the water on the land. There can be but a very short space of time in which the project might have to be financed by the Government.

Mr. YAGER. Well, it is my conclusion that they can't organize a district there and sell bonds on an arid piece of ground until they at least have water there-at least, until they have a population out there; until they have made some showing. Bond buyers would not buy without any security there, and even if they would, it would take at least a year or two years to form a district and float their bonds before they can get any money.

Mr. HAYDEN. There may be a brief period of time, as Mr. Kibbey says, when it might be necessary for Congress to appropriate some sum of money to tide the project over, but in any event if the main canal is constructed from Laguna Dam through the sand hills to the edge of the east mesa, and that can be done by the money raised by the Imperial irrigation district for its share of the work with water that close to the east mesa lands, it seems to me there ought to be very little difficulty in selling bonds enough to make possible the delivery of water to each tract of land. It is provided in the bill that a majority of the acreage of the public lands may be included in such an irrigation district.

Mr. YAGER. Well, if the land is to stand its proportionate cost, what could be the objection of selling it for at least enough to stand that proportionate cost?

Mr. HAYDEN. If the land is sold now, as you propose, three or four years in advance of settlement, it will be sold to men who happen to have money enough to carry that financial load over that period of time, and those who would purchase the land are not the kind of men who would be willing to go out there and make a farm; they will only buy the land, and sell it when water is available to somebody else. This committee and Congress, in my judgment, does not propose to allow the speculators to make that profit; Congress is going to let the actual settler get in on the ground floor. Mr. YAGER. The Secretary of the Interior is authorized under Mr. Smith's bill to make such rules and regulations as are necessary to carry this out. They would not necessarily require the full amount of the purchase price of that land to start with. He could extend the payments for the lands over a period of time until water was actually delivered there, as the money is expended by the department in building the project as needed. I can not see why it would be speculation. The Imperial irrigation district is settled up under the homestead and desert land laws, and paid for its irrigation without any speculation; the land has been sold; The Coachella Valley has been settled up in the same manner without any great amount of speculation, and we have a good class of citizens there. We don't consider the people speculators.

Mr. HAYDEN. To-day a large percentage of your land is held by absentee landowners who are renting it to tenants. Complaint has

been made to me about the land being cultivated by Hindus and that the owners live in other parts of the United States and have no interest in the community. They care for nothing except to get the highest possible rent out of the land or sell it for the highest possible price to some settler. The experience on every irrigation project in the West where that kind of an arrangement has been permitted has been that it is a detriment to the proper development of the community.

Mr. SMITH of Idaho. Does not that condition exist in Iowa and Illinois and everywhere else, where the farmers find that they can make just as much money by renting to somebody who will work. instead of working themselves? There is nothing new about that proposition. Down on your own project the people who bought your land at $225 an acre are not all going to work it. They are going to rent it, or sell it should they have a chance to sell it to advantage. Mr. HAYDEN. But everybody recognizes that tenantry has a very bad effect on our agricultural situation.

Mr. SMITH of Idaho. But how are you going to control it? You can not compel a man to live on a farm and work it if he does not want to.

Mr. HAYDEN. Why not let the settler in on the ground floor, getting the land at its actual cost of reclamation; then a poor man has a very much better chance to prosper than if he buys the land at a fancy price from some one else who had money enough to get in early and hold it for the inevitable advance.

Mr. SMITH of Idaho. I want him to get in on the ground floor, but he may not want to stay there.

Mr. EVANS. Well, even renting enables a poor man to get a start. A broken man can go to work, rent a place, and eventually get himself a home. You should encourage that; it is a very good thing in many cases, fine for promoting industry and reclaiming the land.

Mr. SMITH of Idaho. It is the only chance a poor man has to get a start in farming, to rent a farm. Out in the Twin Falls country the farmers that have been there for 10 years, a lot of them, are renting their farms at $5, $10, or $15 an acre, and turning over all of their equipment, and often a man coming in without a dollar of capital can take hold of a proposition and make it go.

The CHAIRMAN. You mean they buy it?

Mr. SMITH of Idaho. No; by simply renting it—if he is the right sort of a man.

Mr. EVANS. They rent on shares, like they do in Nebraska.

Mr. SMITH of Idaho. If he has the confidence of the people there he does not need any capital.

The CHAIRMAN. I didn't know but what you meant he could by that means finally buy the land.

Mr. SMITH of Idaho. He may, if he makes enough out of the crops. Mr. YAGER. This project, however, is limited under Mr. Smith's bill to ownership of 160 acres.

Mr. SMITH of Idaho. I think it ought to be limited to 80 acres. Mr. YAGER. Limit it to 80 acres. The average farm in Imperial Valley is not over 80 acres, or in the Coachella Valley. That was taken up under the homestead act, and the people are making a go of it. They are making a living and are making money, and the tenants in Imperial Valley and Coachella Valley are good citizens.

Mr. HUDSPETH. Mr. Yager, what will 80 acres there usually produce per annum?

Mr. YAGER. Well, Mr. Hudspeth, in the Coachella Valley this last year we have approximately 8,000 acres under cultivation and it paid net to the farmers $125 an acre. Their onion crop this year, some of it, sold for $1,000 an acre, according to when they sold-the average was over $500 per acre.

Mr. HUDSPETH. I am not familiar with your section as I am with the Imperial Valley. Can you take water out of this all-American canal and run it by gravity over your land?

Mr. YAGER. Yes; there is about 155,000 acres susceptible of irrigation in the Coachella Valley from the gravity flow of the Colorado River. At the present time they are getting it from wells. About the northern part of the Salton Sea there seems to be a check across the valley, and it creates an artesian basin in there. On this side there is no such basin, but they have a limited amount of water. They have about 8,000 acres under cultivation at the present time, and, as I say, the average net income to the farmer this year was $125 an acre over the 8,000 acres.

Mr. HUDSPETH. That is net to them?

Mr. YAGER. That is net.

Mr. HUDSPETH. It wouldn't take him long to pay for the land at that rate.

Mr. YAGER. Some of the farmers bought land this year off of what they made on the crop.

Mr. HUDSPETH. They did that in my section in Texas, too, in the Pecos Valley.

Mr. YAGER. I say this land produced $125 over the entire 8,000 acres; all of that is not under cultivation. A great deal of it is in young date trees and young grapes. So I think it is entirely a reasonable proposition when land right alongside of it will pay $125 an acre, that this Government land will pay as much as soon as water is on it, and if they will sell it and get the money into the Treasury to build the project, that land will pay for itself.

Mr. SMITH of Idaho. I would like to ask Mr. Yager a question

or two.

Mr. BARBOUR. Before you start, Mr. Smith, would you mind stating the principal points of difference between your bill and Mr. Hayden's bill so that briefly we will have the two before us?

The CHAIRMAN. Well, ask your question first, Mr. Smith.

Mr. SMITH of Idaho. I want to ask Mr. Yager what he thought about this proposition. As I understand it, there are about 200,000 acres of new land that will be available if this all-American canal is constructed?

Mr. YAGER. There are about 500,000 acres, Mr. Smith, outside of the Imperial irrigation district susceptible of irrigation under this project. Of that 500,000 acres at least 200,000 acres is good Government land that could be sold.

Mr. SMITH of Idaho. Supposing we set aside 40,000 acres for the State of California for its soldier-settlement plan. We have no Federal legislation for helping the soldiers; we do not know when we are going to get it, and in my judgment it would not be any favor to a soldier to put him down there on that land unless he has got some

capital. Without Federal legislation he must be dependent then on his friends or on this soldier-settlement plan of the State of California. Supposing we turned over 40,000 acres of these 200,000 acres to the State of California under the soldier-settlement plan, and which I understand from Dr. Mead they will finance, and then take 160,000 acres and sell it as the land was sold down on the Yuma project, at not less than $75 an acre.

Mr. YAGER. I believe that would finance it.

Mr. SMITH of Idaho. That would raise a fund of, say, $3,000,000 a year from this 160,000 acres, and the State of California would put up money for the 40,000 acres for the soldiers. That would furnish ample money, then, for the new lands; then let the districts come in and raise their proportionate share of the money by bonding their districts and selling bonds.

Mr. YAGER. I believe that could be financed. I believe the districts and that land could carry 40,000 acres, or perhaps 50,000 acres, for the benefit of the soldiers, but to carry the full amount for the benefit of the soldiers I believe defeats the proposition.

Mr. SMITH of Idaho. I have no interest in any particular piece of legislation; this is simply a suggestion following out the plan under the law enacted at the request of Mr. Hayden, which I remember when he put it through Congress was one of the biggest things for his project, and the land has been sold there. I do not understand why he is opposing the plan to apply it elsewhere, when it works so well in his own district.

It seems to me that we have got to get together here in some way to make these lands pay their proportionate share, and according to Mr. Kibbey the land that is now unoccupied would bring nothing until it was settled, because you could not organize a district until you get settlers there, and you can not get settlers there until you get the water there; so that unoccupied land would absolutely contribute nothing for four years toward this work. In the plan proposed by my bill they would commence immediately to contribute and make the reclamation as proposed, I think, absolutely possible, without delay.

Mr. KIBBEY. Do you want me to reply to that, Mr. Smith?
Mr. SMITH of Idaho. Yes.

The CHAIRMAN. Let us hear from Mr. Barbour first. Do you want to be enlightened any further from Mr. Smith?

Mr. SMITH of Idaho. I will answer Mr. Barbour. It looks to me like we are up against a stone wall with reference to getting these bonds sold under the Kettner bill. When you suggest that municipal bonds be turned over to the Secretary of the Interior to sell, you are suggesting something that is a new policy entirely and one, in my opinion, that will not appeal to the Members of Congress. I believe that it would be impossible to get legislation of that character, because any bonds that are sold by the Secretary of the Interior, or through his office, will be regarded practically as secure as Government bonds, and that the Government is practically behind the bonds; if the Secretary sold the bonds he would be expected to see that they are paid, principal and interest, and I don't believe it is possible to get that sort of a provision on the statute books.

Mr. HAYDEN. Would it be feasible to provide that the bonds of the Imperial irrigation district and other districts would be deposited

with the Secretary of the Interior as security for appropriations made by Congress; that in the event that any district could sell the bonds at par they might withdraw them from the hands of the Secretary of the Interior and deposit the cash in lieu thereof?

Mr. SMITH of Idaho. But you certainly never have known of anything of that kind being done?

Mr. HAYDEN. Yes; there is now on deposit with the Secretary of the Interior the bonds of an irrigation district in the State of Washington as security for the appropriations made by Congress for the construction of the project works.

Mr. SMITH of Idaho. Under some specific law?

Mr. HAYDEN. Under the reclamation extension act, which allows the Secretary of the Interior to deal with an irrigation district and accept the bonds of the district as security for the payment of the construction charge. If the district could sell its bonds at par, why not withdraw them from the hands of the Secretary of the Interior and turn the cash into the Treasury, and thus the transaction is closed? It seems to me that it is a very logical step to take. I do not see how anybody can object to it if you concede to begin with that the bonds of the district are better security for an appropriation made by Congress than the obligation of individual water users, as was the former custom.

Mr. SMITH of Idaho. Well, as I say, I don't care which bill becomes a law, but I think we should get together in some way and bring relief to those people there and get those unoccupied lands under cultivation.

Mr. HAYDEN. That, of course, is really the issue, Mr. Smith, which we often forget in discussing the reclamation of the outside lands. We are making the small thing look like the big thing. The real thing necessary to be done is to provide immediate relief for the people now living in the Imperial Valley. The use to be made of the outside lands is a secondary consideration. If we can agree upon a plan that is satisfactory to all concerned, let us do so; but we must do something for the people in the Imperial Valley. That is particularly true with reference to the Coachella district.

Mr. SMITH of Idaho. There is no question, Mr. Hayden, but what this land would sell readily at $75 an acre?

Mr. HAYDEN. There is a grave doubt in my mind about it.

Mr. SMITH of Idaho. I know there are enough men in the State of Idaho to buy it, who would be glad to buy it. Every time we have an opening there the men come in and subscribe over and over the quantity of land that is available, at prices of over $100 an acre.

The CHAIRMAN. Now, I believe Mr. Yager wants to say something more.

Mr. YAGER. I was going to say that the land out there is better land than the Yuma mesa land that sold for $230 an acre, average, and the land right alongside of it in the Coachella Valley is paying $125 an acre every year on crops.

Mr. EVANS. How much higher is the mesa land than the irrigated land of Imperial Valley?

Mr. YAGER. In the neighborhood of 30 feet, I believe.

Mr. Rose. It starts on the same level and runs to 134 to 138 feet, as against the highest land in the present irrigation district of 34 feet. But practically all of the present land is below sea level.