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.

Colorado River siphon, area, Yuma Valley and Mesa, 99,000 acres.

Main Canal, dam to Colorado siphon, area, reservation, Yuma Valley and Mesa, 105,000 acres..

Farm unit surveys, area, reservation and Yuma Valley, 65,000 acres..
Permanent improvements and land, area, 130,000 acres.

Telephone system, area, reservation, Gila and Yuma valleys, 90,000 acres..
Miscellaneous preliminary investigations, area, 130,000 acres..

Estimated total cost per acre in the Yuma Valley.

$133,073.00 2,100, 845.00

$1.02 16. 16

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 River project of between $300,000 and $400,000.

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.

Mr. 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

recouped for their legitimate expenditures in that connection. I understand that is the universal desire in the Imperial Valley and that they are willing to submit the matter to arbitration, and that the district-this is all informal-is willing to pay such award as might be made under those circumstances. I do not regard it as a matter that should be necessarily regarded as a duty of Congress to see that that adjustment is properly made; and the Government is under no obligation whatever in the matter, legal or otherwise. There is existing a contract on the subject between the Secretary of the Interior and the Imperial Laguna Water Co., and that contract provided for an investigation by Mr. Rose of the project of watering these lands, and provided that the land on the East Mesa should be restored to entry under certain conditions, provided certain other conditions were followed up. In pursuance of that contract Mr. Rose and his associates made certain surveys. They did not make the surveys thorough at all. This long, heavy cut from Pilot Knob through to the Imperial Valley [indicating] was explored only in a very superficial manner because, presumably, of the large expense of doing it thoroughly. The surveys were not extensive.

It was very superficial all around, and owing to that fact the Secretary of the Interior entered into a contract with the Imperial irrigation district to make such part as the district was interested inthat is, this part, not including the long canal [indicating]—the subject of a thorough investigation. There was $45,000 for the purpose, $15,000 of which was put up by the reclamation fund and $30,000 by the Imperial irrigation district, and that examination was made under a board of three engineers, one representing the district, one representing the Government, and one representing the University of California as a sort of an umpire in the case. The board consisted of Dr. Elwood Mead, Mr. Grunsky, and Mr. Schlecht.

The contract with Mr. Rose for his investigations contained in section 5 the requirement that when he submitted his final report one of three things should be done.

First, additional investigations might be required by the Secretary if he thought them necessary.

Second, he might reject the plan entirely; in which case the contract would be brought to an end;

Third, he might accept and approve, in which case the company should have the right to connect with the Laguna Dam, and virtually the stockholders of that company would have had a preferential right to file on the public lands of the East Mesa.

The CHAIRMAN. To what extent?

Mr. DAVIS. To the extent of the existing laws.

The CHAIRMAN. A preferential right?

Mr. DAVIS. Of course, the Secretary did not in terms give anybody such a preferential right. The correspondence shows that very clearly, and everybody understood that; but the effect would be just the same, because

The CHAIRMAN (interposing). The practical effect.

Mr. DAVIS. The practical effect, and that was claimed, I believe, and justly so, by Mr. Rose and his associates. However that is, I am not criticizing but am simply explaining the provisions of the contract,

Now, the final report was made by the Laguna Mesa Water Co. That report, as I say, did not have sufficient evidence upon which to base an estimate of the cost. It had very little examination of the material to be moved in the great cut through the sand hills; it did not provide for nor even discuss the need of storage; and in view of those lacks of this final report I recommended to the Secretary of the Interior that the project be rejected entirely and the contract ended, according to the second alternative in section 5, provided under those circumstances.

Mr. TAYLOR. When did you make that recommendation?

Mr. DAVIS. That recommendation was made early in 1918; I think in February; I haven't the correspondence here, but I can put it in the record if desired.

Mr. SUMMERS. What action was taken under that recommendation? Mr. DAVIS. No direct action was taken under that recommendation, but it was under consideration a while. My principal reason for that recommendation was this: The absolutely essential character of storage. In such a hot, dry country as that to attempt to irrigate land without sufficient water I consider wrong. It would mislead settlers and would lead to suffering, and at the same time by bringing in a vast acreage without water in some years there would be a strong pressure to use the water already appropriated by Imperial Valley and by the Yuma project, and thereby incur a great diminution in their water supply. Mr. Hayden will recall that they did that in the Salt River Valley when such a condition as that existed, when new canals without any shadow of legal right to water actually took it and divided with the rest of the valley, causing them all to suffer, and millions of dollars worth of property was destroyed in that way. Now, it was claimed by some of the Government employees in the service not in the Reclamation Service but in other bureaus-that in entering into the contract with Mr. Rose the Secretary approved in advance his plan to build this project without storage. I was very much surprised to find the opposition to my argument for the cancellation of the contract based upon the supposition and the claim that it was now too late to object to that feature because that was known in advance. Now, the terms of the contract do not bear that out at all. It says he must present a feasible project, and I understood although I was not present when the final negotiations took place on that contract-that the whole question could be considered de novo when he brought his plan in. I didn't know what it should do, nor did I have any control over what it should cover; I found, however, that my attitude had been misunderstood, and in order to set myself right and bring the facts clearly before the Secretary I wrote his assistant the following letter, which I will read with your permission:

DEPARTMENT OF THE INTERIOR,
UNITED STATES RECLAMATION SERVICE,
Washington, D. C., April 3, 1918.

Hon. E. C. BRADLEY,

Assistant to the Secretary.

Department of the Interior.

DEAR MR. BRADLEY: Recent conferences have impressed me with the grave importance of clearing up an evident misunderstanding which in my view places the honor of the department in some peril, but which can be removed if prompt and decisive action is taken in the right direction.