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I don't know and I can't state what the mental processes of Secretary Lane were when he signed that public notice. I do know what my own mental processes were when I recommended it, and I do know that we considered from the first that connection with the Laguna Dam by the Imperial Valley was just about as certain as connection with the dam by the Yuma Mesa, and they are put on the same basis. We charged a portion of the cost to the Yuma Mesa; if we don't get that back, we lose it. We charged a proportion of the cost-or at least we failed to charge to the Yuma project-because of the probability of collecting it from the Imperial Valley, $1,600,000, and now this bill proposes that the reclamation fund shall lose that.

Mr. HAYDEN. Is it not a fact, Mr. Davis, that in arriving at the $75 an acre, a schedule was made showing the various items of the cost of construction, including the Laguna Dam, which totaled a certain sum of money and that sum provided by the acreage under the Yuma project made $75 ?

Mr. Davis. The project manager made such a computation, but the secretary did not have it before him when he signed this notice. It did not include all the facts; it simply assumed some knowledge on my part in making that report and did not include the probability of connecting with the Imperial Valley.

Mr. HAYDEN. I have a copy, though not at hand, of the report of the Board of Engineers, recommending $75 an acre as the charge for this project, and in that report there is a schedule which shows the items of construction for which $75 an acre was mentioned. Mr. Davis. Does it show $75 to be the cost of those items? Mr. HAYDEN. It shows $75 covers those items.

Mr. Davis. On that, Mr. Chairman, I beg to say this: That from my own knowledge I know that either it does not show that it covers all these items or the items do not include all the expenditures, because $75 an acre does not cover the cost of the system for these lands that are under public notice. To make up the cost requires this $1,600,000 which is in the contract with the Imperial irrigation district. If that is not recovered in the reclamation fund-and it will not be if this bill passes in the form it is—the reclamation fund will lose that much expenditure which has been made in good faith and has been useful for the Yuma project.

The CHAIRMAN. Now, pardon me there, what did the Laguna Dam cost?

Mr. DAVIS. A little over $2,000,000. That is, with the appurtenances, the sluice works, etc.

The CHAIRMAN. Now, what part of that was imposed upon the Yuma project? Mr. Davis. The balance of the cost above $1,600,000. The CHAIRMAN. It cost $2,000,000 in all ?

Mr. HAYDEN. Unfortunately I was not aware that Mr. Davis intended to present this matter this morning, but I shall bring to the committee and place in the record an itemized statement made up by the engineers at the time the construction charge of $75 an acre was fixed for the Yuma project. The way I know that it was fixed on that basis is that the representatives of the water users under the Yuma project presented the question in that light to the Secretary

of the Interior and convinced him that morally and equitably they were entitled to this relief. The Secretary said that he would be glad to give them credit for any money received from the Imperial irrigation district for the privilege of connecting with the Laguna Dam if he had authority of law to do so. Since he has not authority of law he now recommends in this letter than Congress enact legislation to reduce the charges assessed against the water users of the Yuma project by the amount received for the use of the Laguna Dam from the Imperial irrigation district or other districts. Mr. Davis. That is true.

YUMA, ARIZ., February 26, 1917. From: Project Manager. To: Director and Chief Engineer, Washington. Subject: Determination of costs, second unit, Yuma project.

1. This office is in receipt of your telegram dated February 24 advising that pulilic notice of the second unit has not yet been approved and requesting that this office write or wire our basis for the construction charge of $75 per acre.

2. In considering the total cost per acre for construction charges the various features which make up this charge will be discussed, as follows:

3. Diversion.The cost to date of the Laguna Dam and headworks is $2,100,845. This cost prorated over the entire project of approximately 130,000 acres results in a diversion cost per a cre of $16.16.

4. Main canal.—The main canal from Laguna Dam to the Colorado River siphon has sufficient capacity for the area, including the Indian reservation, Yuna Valley, and the Yuma mesa, a total of 105,000 acres. The cost of this feature was $607,307, resulting in a cost per acre of $5.75. The Colorado siphon, which has a capacity for 50,000 acres for Yuma Valley and 10,000 acres of the Yuma mesa, a total of 90,000 acres, cost $695,000, or (per acre) $7.70.

5. Laterals.—There has been expended for laterals and canal structures in the Yuma Valley $983,000. Using an area of 50,000 acres in the Yuma Valley, we have a cost per acre of $19.66 for laterals. At the present time there are yet to be completed some small laterals and structures which we estimate may cost $25,000, giving us a per-acre cost for the lateral system not yet expended of 50 cents, or for the lateral system a total cost of $20.16.

6. Drainage.The expenditures to January 1, 1917, for this feature cover only such preliminary work as is necessary to lay out the main drain in Yuma Valley, and construction work has practically just begun on this feature. Our estimate per acre for the construction of the main drainage canals and main laterals is $15.

7. Examination and surreys.—The total of this amount, which includes some miscellaneous construction, is $283,114 for the entire project. This divided by the project area of 130,000 acres is, per acre, $2.17.

Farm-unit surveys.---There has been expended on farm-unit surveys of the Indian reservation and Yuma Valley $31,821.15. This prorated over the 65,000 acres gives a cost per acre of 49 cents.

Surveys and examination for upper-river projects have been deducted, and the amount stated is the result obtained by eliminating such surveys, examination, and inspection as were not properly chargeable to the Yuma project.

8. Telephone lines.--Lines built in the Gila and Yuma Valleys and Indian reservation cost $11,160. The area is 70,000 acres. Cost per acre, 12 cents.

9. Deficit, operation, and maintenance.—The operation and maintenance costs have been, since the completion of the siphon, between 75 and 90 cents per acre. Our water-rental contracts in the Yuma Valley are in force at the rate of 50 cents per acre-foot. Included in this deficit which has accumulated is the amount of the deficit accruing in the period between 1908 and 1912 in the operation of the pumping plants in Yuma Valley. The total deficit to January 1, 1917, was $295,229. We estimate that the continuance of the present waterrental contracts at 50 cents an acre-foot will create a deficit during the present year of $25,000, which gives a total of $320,229 to January 1, 1918. With an area of 50,000 acres, the cost per acre for this feature would be $6.50.

10. Miscellaneous preliminary investigations, 130,000 acres (total for project), divided into an expenditure of $119,528, 92 cents.

Total, $74.97.

11. It will be noted that one of the principal construction features of the Yuma project work, namely, that of the levees and their rock protection, has not been included in this statement. To date $2,354,000, or over $18 per acre, has been expended on this feature, and to properly revet the existing levees the total cost will be in the neighborhood of twice this amount. This protective feature is not completed, and this office does not believe it is a proper charge against the project lands, but rather. One which should be repaid by Federal appropriation, especially on account of the precedent established in work done for the protection

of the Imperial Valley.

L. M. LAwson.

Cost of Yuma Valley unit—Yuma project.

Total. or

Examination and surveys, area 130,000 acres.................................... $133,073.00 $1.02

Diversion works, area 130,000 acres.............................................. 2,100,845.00 16. 16 Main Canal, dam to Colorado siphon, area, reservation, Yuma Valley and Mesa, 105,000 acres.------------------------------------------------------------------ 607,307.00 5.75

Colorado River siphon, area, Yuma Valley and Mesa, 90,000 acres............... 695,000.00 7.70 Yuma Valley laterals:

Area, 50,000 acres.----------------------------------------------------------- 983,000.00 19.66

Estimated to complete system. . - - - - -- ---- -- 25,000.00 .50 Drainage system, estimated per acre. ----------------- 15.00 Deficit, operation and maintenance u

To Dec. 31, 1916....... 295,229.00 |..

Estimated deficit, 1917. . 25,000.00 |.. Total, on area, 50,000 acres................. - - - - - - - - - - - - - - - - - --- - - - - - - - - - - - - 320,229.00 6.50 Farm unit surveys, area, reservation and Yuma Valley, 65,000 acres............. 31.821.15 .49 Permanent improvements and land, area, 130,000 acres. ------------------ 150,041.00 1.15 Telephone system, area, reservation, Gila and Yuma valleys, 90,000 acres. -- 11, 160.00 . 12 Miscellaneous preliminary investigations, area, 130,000 acres.......... ----------- 119,528.00 .92 Estimated total cost per acre in the Yuma Valley...... -------------------|-------------- 74. 97

Mr. WELLING. In connection with that, if Mr. Hayden insert such a statement in the record—and I quite agree that it ought to be done under the circumstances—I suggest that an analysis of that statement be made by Gen. Davis, and he be given an opportunity to put that into the record also. Mr. DAVIs. I can state right now, Mr. Chairman, what the difference is. The statement, I think, that Mr. Hayden referred to is the one I am familiar with, and the essential feature of it is that it does not include any of the levee or river front protection. The CHAIRMAN. And that was how expensive? Mr. DAVIS. Approximately, this $1,600,000. There is a little less than that in the actual expenditures for this part of the valley in construction; but there is a lot of maintenance work which comes on it that makes it more than that. Mr. HAYDEN. Is it not true, Mr. Davis, that in assessing the costs to be charged to the water users under the various reclamation projects in the United States, under the direction of the Secretary of the Interior, a board of engineers was appointed which had authority to examine into all the expendtures made on any project, and whenever in their judgment any expenditure had been made which the water users under the project should not be required to pay they eliminated such expenditures? Mr. DAVIs. No: I beg pardon. Mr. HAYDEN. There was an elimination, for instance, on the Salt Itiver project of between $300,000 and $400,000.

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Mr. Davis. Not by the board. They had no authority to eliminate anything. They made recommendations to the Secretary of the Interior.

Mr. HAYDEN. I agree that the Secretary alone had authority to do the final act of elimination, but under his direction they were given authority to report to him what eliminations should be made on the various projects, and eliminations were made on practically all of the projects, were they not? Mr. Davis. No, sir; very few. Mr. HAYDEN. On about how many ? Mr. Davis. Salt River is the only one I know of. Mr. HAYDEN. Are you sure that was the only one?

Mr. Davis. No; I am not; but I will say it is the only one I know of.

Mr. HAYDEN. The report of the board covering all of its activities would show all the eliminations made ?

Mr. Davis. No; they had no authority to eliminate. As one of them expressed it, “ We didn't eliminate because we had no eliminators."

Mr. HAYDEN. They made recommendations to the Secretary of the Interior.

Mr. Davis. Yes; but the Secretary didn't make any except the Salt River, as I recall it. There may be others, but they are very few.

Mr. HAYDEN. There was a reduction in the construction charge on the Salt River and Yuma projects.

Mr. Davis. I don't think he eliminated anything in here.

Mr. HAYDEN. The Secretary of the Interior must have eliminated some of the costs charged to the Yuma project, because the total amount carried on your books at the time the construction charge was fixed per acre on the Yuma land was greater than the announced · cost of the project as fixed by the Secretary, so there was an elimination.

Mr. Davis. No; that is not an elimination; it is of the same nature as the extra cost of the Shoshone Dam, that is not yet assessed against any land opened, because it will serve lands that have not yet been opened, and that is the case with the Laguna Dam, it will serve other lands than those to which the public notice applies, and consequently a portion of its cost was excluded from that public notice. That is just the whole thing in a nutshell. Part of the Laguna Dam was charged to the Yuma mesa and will be eventually, we hope, repaid by the Yuma mesa; part of the Shoshone Dam was charged to the Willwood unit, on which we have never collected a dollar, and if we never build we will never get it back, but if we build we expect to get it back. That would be a parallel case if it were proposed to relieve those new lands of that charge, or rather credit, back to lands that have already been relieved of part of it. For example, if we build the Willwood unit in the Shoshone project we could just as reasonably demand that a portion of the money collected from the Willwood unit be credited back to the lands that have already been opened, when they have borne only their just share of the dam. It is a parallel case.

The CHAIRMAN. In other words, they would get theirs for nothing after a while.

Mr. DAVIs. Yes, sir; exactly a parallel case. Mr. HAYDEN. Is there anything that you have said to this committee to-day with respect to this controversy that you did not say to the Secretary of the Interior at the time the representatives of the water users under the Yuma project were here insisting that they obtain this relief? “ Mr. DAVIs. These illustrations that I have just given, I did not give the Secretary of the Interior. Mr. HAYDEN. But the substance of your argument to-day was made at that time, and the Secretary of the Interior decided against you? Mr. DAVIs. Yes, sir. Mr. SMITH of Idaho. Following the suggestion of the chairman that they would get the lands for nothing eventually, under those conditions isn’t it true that the Yuma settlers are getting water for nothing anyhow because of the receipts from the sale of power generated? Mr. DAVIs. No; you are getting that mixed with the Salt River. Mr. SMITH of Idaho. Is that true of Salt River? Mr. DAVIS. That is true of Salt River. They are not paying anything. o SMITH of Idaho. They are not disputing what they should pay, are they? Mr. HAYDEN. No. Mr. SMITH of Idaho. They are not in litigation about it? Mr. DAVIS. No. The CHAIRMAN. That is, the power makes it free for them? Mr. DAVIS. The net receipts from power are more than the construction charges per annum to-day. Mr. HAYDEN. That they have the benefit of the receipts from the sale of power is due, Mr. Davis, in part to the fact that the water asers under the Salt River project assessed themselves to the extent of $1,200,000 to complete the power plants? Mr. DAVIs. No, sir. Mr. HAYDEN. Now, there is one other matter in connection with this bill, Mr. Davis, upon which I would like to have your opinion. The Secretary of the Interior transmitted a letter to the chairman of this committee to this effect: In connection with my report to your committee of even date herewith upon H. R. 11553 I inclose for your consideration a petition filed with me by Mr. Mark Rose, president of the Imperial-Laguna Water Co., which petition, in my opinion, presents matters more properly determinable by your committee and by Congress than this department. What Mr. Rose desires is that the bill be amended to provide that the certain area of land which is now included in the lands to be reserved on the east mesa for the use of soldiers be set aside for the benefit of the Laguna Water Co., of which he is an officer. I would like to have your opinion as to whether Congress should care for Mr. Rose in the way that he thinks he should be cared for, and what you think of his claims? Mr. DAVIs. It is true that Mr. Rose and his associates have spent a great deal of time and money in promoting the all-American canal and bringing about conditions under which the East Mesa here would be irrigated by gravity from the Colorado River and the Laguna Dam, and I think no one will question the fact that they ought to be

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