Mr. HAYDEN. Where is that $75,000?

Mr. ROSE. It has been sunk in surveys and general work to carry this on-running a newspaper, for one thing very largely, and several other things, to bring about the all-American canal and the irrigation of these lands.

Mr. HAYDEN. As I understand the situation, any stock sold prior to your contract in 1914?

Mr. ROSE. Yes.

Mr. HAYDEN. Can claim no rights under it, because the contract was not in existence.

Mr. ROSE. The department, the men who drafted that contract knew the existence of that stock, and they thoroughly understood it was outstanding and would be a part of the stock which the Imperial Laguna Water Co. would use as a mutual water company. That was explained to the department. I think that Mr. Davis will say that that was known.

Mr. HAYDEN. If you sold stock in a mutual water company that you organized yourself in 1914 and made the sale at that time and you did not obtain the contract from the Secretary until 1917, any person who bought stock in 1914, or prior to July 6, 1917, can have no claim of equity under the contract, because it was not in existence at the time they bought the stock.

Mr. ROSE. They certainly can, because their money was spent to bring about the very thing that brought about the contract. Before we came here to contract we did run a preliminary survey, both through Mexico and here [indicating], and we brought that report to the department to show what the conditions really were, and we worked continuously to get that contract and bring it about. That land had lain idle since 1902, not only the public land, gentlemen, but thousands of acres of school land among it.

Mr. HAYDEN. Have you sold any stock since the contract was made?

Mr. ROSE. Not one share: no, sir.

Mr. HAYDEN. How many stockholders have you?

Mr. ROSE. I could not answer that exactly. There are several men in the valley like Mr. Forrester and other men, who have several sons, and who have ranches in the valley, who got behind this proposition.

Mr. HAYDEN. There is a list on the books somewhere that shows who the stockholders are, isn't there?

Mr. ROSE. I could get the list.

Mr. HAYDEN. Are there 20 or 30 or 40?

Mr. ROSE. I suppose on the books there are 50 or 60.

Mr. HAYDEN. You think 50 or 60 people are interested in this matter?

Mr. ROSE. There are more than that, because a great many of those men have sons who have put up money.

Mr. HAYDEN. Well, how many do you think?

Mr. ROSE. About 100.

Mr. HAYDEN. You think there are 100 people who have some interest in your company?

Mr. ROSE. Absolutely. About 15 of them are soldiers that bought stock before the war a long time.

Mr. HAYDEN. Can you furnish the committee with the names and addresses of those people?

Mr. ROSE. I could in a week or so, by writing out there.

Mr. HAYDEN. You have no such record here?

Mr. ROSE. No.

Mr. HAYDEN. If it is agreeable to the committee, Mr. Chairman, I think we ought to know just who belongs to this company, where they live, and what interest they have in it.

Mr. SMITH of Idaho. Why would that be relevant to the consideration of this bill? We might just as well know who owns the land down in Mexico, the people that are trying to hold up this development.

Mr. HAYDEN. I would like very much to know that, too. I think a list of both of them would be very pertinent.

Mr. TAYLOR. I would like to get those fellows, too.

Mr. HAYDEN. The point I want to bring out by questioning Mr. Rose is this: That on his own statement the maximum number of people interested in his project are not more than 100, and that these 100 people are insisting that 50,000 or 60,000 people residing in the Imperial Valley shall conform to their wishes in the passage of this legislation.

Mr. ROSE. We are not insisting on any such thing, Mr. Hayden; we are insisting on this, that the people who live inside of Imperial Valley have no interest in that outside land excepting as it helps them to build a canal for their own lands and their own use. There isn't a man here that ever represented Imperial Valley that owns or represents or ever did represent one acre of land outside of that valley, and the only interest that Imperial Valley has, gentlemen, is this: This report shows that Imperial Valley can build a canal for its own use, 6,000 second-feet capacity, for $26,000,000; or it can get the same canal by joining with the outside lands at $17,000,000, and that is really the only interest that Imperial Valley has in this matter. When you come right down to it, that is their interest, to save $9,000,000 for themselves.

Mr. HAYDEN. Of course, there is bound to be an advantage in cooperating and bringing all interests together.

Mr. ROSE. Yet they are refusing to cooperate. They want a handpicked cooperation.

Mr. WELLING. Of course, Mr. Rose represents not only the Laguna Water Co. but also the Coachella Valley County water district among these 100 men that he refers to.

Mr. HAYDEN. No.

Mr. ROSE. They are to this extent: That we made the first survey that ever showed those people what could be done. We brought them here; we went among them and made surveys and showed them what they could do. We also did the same thing with the east. side, which I represent here, which is entirely either lands that have been filed on or private lands. I represent them here; they were brought into this thing by the showing made by the Imperial Laguna Water Co. I think Mr. Yager will bear me out in that statement; and he is here.

Mr. WELLING. I would like to ask Gen. Davis a question here. It is a little apart from the trend the discussion has taken.

Section 13 of this bill, H. R. 11553, provides for storage. Now, I can understand, and I have understood all along, the danger that now confronts the Imperial Valley. I can understand the anxiety of my friend Kettner in pressing this legislation, and these gentlemen who represent the irrigation companies. I can understand the efforts of my friend Hayden here all through this measure in protecting the interests of the people that he represents; but I want to call attention to the fact that all the storage that goes-all the stored water that goes into the Imperial Valley, or into any other project on the lower waters of the Colorado River has to be stored in the States of Colorado and Utah. I want to know if there ought not to be inserted in this bill somewhere a provision that the people living adjacent to these storage areas in Utah and Colorado may have some opportunity to cooperate with the Reclamation Service in the use of the stored water before it goes down there to save the Imperial Valley and the Yuma project?

Mr. SMITH of Idaho. While Mr. Welling is occupied, I wish I might ask a question. Mr. Hayden has stated that Mr. Rose is insisting on an amendment to the Kettner bill which will protect him and his associates, and I would like to ask Mr. Rose whether or not he will insist on the same sort of a provision in the bill I have introduced, should it be adopted?

Mr. ROSE. I would not. That bill leaves it absolutely open with the Secretary to allow us to go ahead and build the lateral system, and we would not insist there.

Mr. HAYDEN. The reason why that could not be done under this bill, H. R. 11553, is that all of the East Mesa land, a part of which Mr. Rose desires to develop, is reserved for soldier settlement.

Mr. SMITH of Idaho. There isn't any land reserved for soldier settlement there.

Mr. HAYDEN. Yes; all of the land south of the third standard parallel.

The CHAIRMAN. Just a moment there-I understand Mr. Davis directly to say that this committee would have nothing to do with the Rose contract-that is, Congress would not, not this committee. Mr. DAVIS. Certainly I see no obligation. Of course, Congress could do anything it chose in regard to it.

The CHAIRMAN. Suppose we go right along here and this committee proceed regardless of that contract; where is it going to leave Mr. Rose?

Mr. DAVIS. I haven't any doubt, though, that the Imperial irrigation district will make some settlement with Mr. Rose. They expect to treat him right, I think.

The CHAIRMAN. Then, if the committee should act and pass this bill, he would be left to the Imperial irrigation district as a moral proposition rather than a legal liability?

Mr. DAVIS. Yes, sir.

Mr. HAYDEN. Now, let Mr. Davis answer Mr. Welling's question. Mr. DAVIS. As I understand it, Mr. Chairman, answering the question propounded by Mr. Welling, the gentleman from Utah suggests the insertion of some proviso enabling or requiring the secretary to make such arrangements as may be feasible for the use of a portion of the stored water in the vicinity in which the reservoir is constructed.

Mr. WELLING. Providing, of course, those people pay any assessed charges that may be made against them.

Mr. DAVIS. That is exceedingly desirable, and the widest possible cooperation, of course, is necessary in order to get this done in the cheapest and most feasible manner. I think, however, that the present law, so far as the legal power is concerned, is already vested in the secretary.

The CHAIRMAN. That was just what I was going to suggest.

Mr. DAVIS. Under the Warren Act he could make cooperative agreements with the irrigators to share in this storage, just as he has under the Pathfinder and other reservoirs that have been constructed under the reclamation act, and under which the water is delivered under the Warren Act to various districts interested.

Mr. TAYLOR. Let me interrupt you there. Supplementing what Mr. Welling has said, as I understand it, you have one power site withdrawal already up in Grand County, in Colorado, near my home, and if that dam should be put into the Grand River there, which is the Colorado River-the Colorado River is the Grand River-if that should be put in, it not only covers above one-third of the whole county, but covers the city of Kremling 85 feet deep in water and destroys an immense amount of property in my State, and I was wondering whether or not there ought to be some provision in here that would protect our people against this vast storage proposition for the benefit of the people down below, and more especially in section 15, which provides that the natural flow of the Colorado shall first belong to the Imperial Valley, and the second right to these other mesas. Some of our people up there have been irrigating for a great many years before anybody was in the Imperial Valley.

Mr. DAVIS. Well, Mr. Taylor, this section 15 provides for the natural flow of the river "diverted under the provisions of this act.” Mr. TAYLOR. I understand.

Mr. DAVIS. That does not apply to anything above.

Mr. TAYLOR. Well, probably that is the construction, but we are a little bit skeptical about this act of Congress ignoring, as you might say, all the rest of the river up there and legislating for this Imperial Valley country.

I may say, Mr. Davis, that we have the impression that we ought to add some little proviso there, to just carry out what you say is the law anyhow, but to allay the possibility of any fears that our reclamation projects and our irrigation works up in Colorado have, and more particularly the lands and towns that will be flooded if this storage proposition is carried out.

Mr. DAVIS. Mr. Chairman, in answer to the gentleman from Colorado, I think the best answer is the one that I made previously, a year ago before this committee, and which I think it is not undesirable should be enacted into law, and that is this: That with my knowledge of the physical conditions in the Colorado Basin I do not consider it physically feasible to interfere with the water supply of the lower river by developments on the upper river.

Mr. WELLING. You have said that before to this committee, and I am glad to have you repeat it.

Mr. DAVIS. If any inhibition could be written into this that would make that the permanent policy of the Government, I think it would be a good one.

Mr. HAYDEN. Let Mr. Davis prepare such an amendment.

Mr. TAYLOR. I would like to have something of that kind go into this bill, because it will satisfy Wyoming, Colorado, and Utah, those three States up there.

Mr. DAVIS. I want to say this much in addition, provided the water is not carried out of the basin, and provided that the flow of the river is not stored during the low-water months.

The CHAIRMAN. What was that last proviso?

Mr. DAVIS. That the water is not stored in the additional storage reservoirs on the headwaters in the low-water months. Of course if they begin storing water in August it would interfere with the people below, but nobody wants to do that.

Mr. TAYLOR. No; they store water in May and June.

The CHAIRMAN. The economical and equitable way is, that the whole Colorado River must be treated as a unit pretty much, I would say.

Mr. DAVIS. Yes.

The CHAIRMAN. And all of the reservoirs.

Mr. DAVIS. Yes. And the effect of storing water during May and June, which are the high-water months, and during the spring and winter, for that matter, but especially in May and June, and using that upon the upper lands is not injurious to the lower valley, because it stores it in months when they have an excess, and there is some return seepage. If it is not taken out of the basin, that augments the flow in the fall, and especially there is a benefit in such months as October, when the return flow would probably be as great as any other month, and when they don't use any water for diversion in those colder countries.

The CHAIRMAN. In other words, regulate and equalize the distribution.

Mr. DAVIS. It has that tendency; yes, sir.

Mr. HAYDEN. Would it be feasible, Mr. Davis, for you to prepare an amendment to the bill which would amount practically to the reenactment of the existing law with respect to the right to sell surplus water, etc., wherever reservoirs are constructed and provide for these other matters you have mentioned?

Mr. DAVIS. Possibly. I think that we could. If we should say that nothing in this bill should interfere with the provisions of the Warren Act, that might be sufficient for that part. Then, as to the other part, that neither shall it interfere with the water right, the storage, and use of water.

Mr. HAYDEN. Yes.

The CHAIRMAN. There is something here about the Republic of Mexico, but that does not bear on this necessarily. That is sec

tion 16:

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 if 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.