Mr. ROSE. You can't do it. In the first place, you can't divert. It is 30 feet lower right there at the point of diversion than up here on the red line. There is 30 feet difference, and you couldn't bring your water through; and if you do, you would only strike a portion of this public land. Our heavy cost in building this canal is not from Laguna Dam to our present heading, but it is from the present heading west for about 12 miles.

Mr. LITTLE. Suppose you build this canal from your present land at the Mesa land where it strikes it, instead of coming down that natural arroyo, you build a canal of your own, where could that canal be built, how close to our line and yet serve the purpose of bringing water around to you?

Mr. ROSE. You mean how close to the line in Mexico?

Mr. LITTLE. Yes.

Mr. ROSE. Not very much closer than it is now-probably half a mile or so up at this end. Then, of course, it could be straightened out. But if you are in Mexico it doesn't make any difference whether you are in there 5 miles or 1 mile, you are subject to their jurisdiction and dictation and domination and everything else, and you can't get away from it.

Mr. LITTLE. That is where the Secretary of State ought to be able to make a deal.

Mr. ROSE. Now, I would like to say just one more word. There is this to be said about the diversion of our water here, regarding the Mexican company, the fact that we are close to Mexico down here, in my mind, doesn't make any difference. I don't see why we should be prevented from developing our land because we are close to the boundary, any more than lands up in the other 7 or 8 or 10 States. which are 1,000 miles away. I don't see that the distance from the Mexican boundary makes any difference. If we are going to be stopped or restricted in our development, it looks to me like that same restriction would have to be placed all along the Colorado River.

Mr. LITTLE. Nobody suggested that.

The CHAIRMAN. There is no question about that.

Mr. ROSE. Now, there is one other thing-Mr. Sinnott suggested this. Along in 1910 an act of Congress was passed which provided for the taking out of the United States Treasury of some $20,000,000and loaning it to the Reclamation Service to complete their projects. It also provided that if the money was not in the Treasury to take out, they should sell short-time certificates to get it. Of course, that was to finish Government projects, reclamation projects, but I can see no difference between that and one right across the river. The fact that we have helped ourselves get as far as we have should not prohibit us from coming to our Government and asking for assistance to go further simply because the other fellow has not helped himself and they did help him. Now, that has been done and they did it to the extent of $20,000,000 to complete those projects, and I have the bill here.

Mr. HAYDEN. You refer to the act whereby $20,000,000 was advanced out of the Treasury to increase the reclamation fund so as to complete the 32 projects that had been started.

Mr. ROSE. Yes.

Mr. HAYDEN. That money had to be repaid by the projects.

Mr. ROSE. Yes, sir; excepting that we filed security for ours and they did not in their case. But the two acts are identical and the money came the same way, and it provided that the Secretary of the Treasury should issue certificates to get this money, the same as this bill does, however, and I don't think they ever issued the certificates. I think the Secretary advanced the money from the Treasury, but the bill directed him to sell certificates if necessary.

The CHAIRMAN. That is correct.

Mr. GATES. Can you state how many million dollars will be back of our bonds—that is, in property in the district? You stated the assessment, but you did not state the total value.

Mr. ROSE. Well, the value, as accurately as I am able to give it, is probably about $100,000,000 to-day, of actual value on the 410,000 acres, which is less than half of the area which the proposed canal will irrigate.

Mr. LITTLE. How much more would that land be worth if you had this bill through?

Mr. Rose. It would be worth $100 an acre more the minute the water is provided-every acre of it now in the valley.

Mr. LITTLE. And it would be that much better security?

Mr. ROSE. Yes; you go to the Yuma project and their land is selling for $100 an acre more than ours, and there is no difference in its productive value. Our land statistics show that it produces as much and produces everything. The only difference is that Yuma has a permanent diversion and a water system all on American soil, and we have an unstable diversion and a water system in Mexico. Otherwise there is no difference. Climatic conditions and soil conditions are the same.

The CHAIRMAN. As the basis of this valuation now, do you take the selling value, the market value, or the assessed value?

Mr. ROSE. We take the selling value under present water conditions. Our land produces double what we assess it at every year, on the average.

The CHAIRMAN. That is what I wanted to know.

Mr. ROSE. We exported between $40,000,000 and $50,000,000 worth of farm products last year, and that doesn't say anything about the amount that we consumed and the amount that we are still producing.

The CHAIRMAN. Then, the assessed value, which is the basis of the bond issue, would be $100,000,000?

Mr. ROSE. No; the assessed value would be about $35,000,000.
Mr. SMITH of Idaho. The actual value?

Mr. ROSE. The assessed value, I stated, would be about $35,000,000, and actual value about $100,000,000

The CHAIRMAN. And the bonds would be $30,000,000?

Mr. Rose. Yes, sir.

Mr. SMITH of Idaho. You don't mention in here, Mr. Rose, in the bill-and Mr. Kettner-any limitation to the amount of bonds to be issued?

Mr. KETTNER. $30,000,000. The Secretary's letter shows that.

Mr. SMITH of Idaho. But it is not in the bill. What does the Secretary say?

Mr. KETTNER. The Secretary's letter shows that the cost of the all-American canal will be $30,000,000.

Mr. SMITH of Idaho. But there is nothing in the bill providing that. He might go ahead and issue bonds up to $50,000,000.

Mr. WELLING. Assuming that the Government guarantees the bonds, have you a program for the sale of these bonds? Who is going to buy them? Have you got a market for them?

Mr. ROSE. No; the bill provides that the Secretary of the Interior can accept our bonds and file them with the Secretary of the Treasury, who shall sell Government certificates secured by them; that he shall sell the certificates in the open market, and our bonds will have to be voted with a sufficient rate of interest to make them an inducement to the investor to buy.

Mr. HUDSPETH. Would those bonds have to be sold before your money was available?

Mr. KETTNER. Those bonds are held by the Government as security for the repayment of the money furnished by the sale of certificates by the Government.

Mr. HUDSPETH. But what I am getting at, Mr. Kettner, would those bonds have to sell before your money would be available for this work?

Mr. KETTNER. They don't sell them at all. The Government holds the bonds as security.

Mr. HUDSPETH. Then the Government puts the money up?
Mr. KETTNER. The Government puts the money up.

The CHAIRMAN. The Government sells its certificates that it issued and realizes money by the sale of those certificates.

Mr. HUDSPETH. And the bonds do not sell at all?

Mr. KETTNER. No; they are held as security by the Government. Mr. ROSE. I have got just one other thing that I want to say. Thirty-five million dollars is the assessed value of this land in here [indicating]. That does not include this Coachella Valley. We don't know what that is. Of course, it probably runs into millions. That only includes this land here [indicating], and, of course, that would be doubled just as quick as you built the canal through.

Another thing, some question was raised as to the limit of the bonds. The bonds are limited to this particular project, and there has been a report made, a joint report

The CHAIRMAN (interposing). The bonds are limited to what?

Mr. ROSE. To the building of this canal here and the canal that connects up the districts, if the Secretary accepts the bonds, and it has been estimated that the cost of building that far will be about $30,000,000.

Mr. LITTLE. How far is this going to carry that water now? Point it out to us.

Mr. Rose. It is going to start at Laguna Dam, run southwesterly for 17 miles to a point near the international boundary line, thence westerly for about 40 miles, connecting up with the entire system of irrigating canals.

Mr. LITTLE. Well, what about the brown?

Mr. ROSE. We can't tell about that.

system here [indicating].

You see we build our lateral

Mr. LITTLE. All this big dit h you are talking about will water the brown land, too?

Mr. ROSE. Yes.

Mr. SUMMERS. What is the length of the red line?

Mr. ROSE. The red line is about 60 miles.

Mr. HUDSPETH. All in the United States?

Mr. ROSE. All in the United States.

Mr. SUMMERS. Is it estimated that the $30,000,000 will construct any of the laterals?

Mr. ROSE. No; the main canal. That is, with two power plants on it, and to pay for the connection with the dam.

Mr. BARBOUR. Who will control that all-American canal, Mr. Rose, if it is built, the Imperial district, the Laguna district, or jointly, or how?

Mr. Rose. I couldn't answer that now. It is possible that all of this land will be included with the district. It is in Imperial County, and it is barely possible this will all be one district. It may not; it may be controlled by two districts.

This land [indicating] is not in any district here. Now, that land may be taken into the present district, or it may form a separate district, or it may join one, or the other may join Coachella.

Mr. WELLING. If these people in Riverside County are willing to cooperate with you, aren't you going to have a good deal of trouble with men who have already got irrigation water there?

Mr. ROSE. They organized a district and have had their attorney here, but he has gone back. I hold their credentials and they have taken this matter up and are not only willing but anxious to connect, because they realize that their irrigation there at present is only about 10,000 or 12,000 acres with little chance for expansion.

Mr. WELLING. And they would rather have the gravity water? Mr. Rose. If they can get gravity water and get it for 150,000 acres, you can readily see what it will do for them.

Mr. SMITH of Idaho. I want to ask you one question. Do you think there would be any difficulty in selling this land, this unentered land, at $10 an acre?

Mr. ROSE. No; the difficulty would be in keeping them off of it. Mr. SMITH of Idaho. In that event if it is all sold you would have quite a guaranty fund right on the start.

Mr. ROSE. Yes; that would probably be filed with the Secretary of the Treasury.

Mr. SMITH of Idaho. You would have about $4,000,000?

Mr. Rose. No doubt he would have $4,000,000 before he was called on to expend the full amount. They probably would not sell all of the certificates at first. If this work cost $30,000,000 he would probably sell $8,000,000 or $10,000,000 and spend that, then sell some more, and by the time the $30,000,000 had been expended you would probably have all of the $4,000,000 and possibly more guaranty fund deposited with the Treasurer besides the bonds to the full face value of the expenditure.

Mr. LITTLE. Mr. Rose, where does the Yuma project take its water out of the river?

Mr. ROSE. They take it out right here at the Laguna Dam [indicating] and bring it down on the California side and take it under with a siphon at Yuma and run a canal around and irrigate some

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40,000 acres here [indicating], and they irrigate quite a large area here [indicating].

Mr. LITTLE. Why do they go to all that trouble? Why don't they take it out on the Arizona side?

Mr. Rose. It is a great deal more expensive. They have the Gila River to contend with, and it was much more expensive. Besides that, they cover all this area here in California [indicating].

Mr. LITTLE. How much more would it have cost if they had done it the other way?

Mr. ROSE. I couldn't say.

Mr. SMITH of Idaho. They can irrigate all of that land in there by bringing it out that way.

Mr. ROSE. It would cost them a great deal more; I am quite sure of that. They have on this side a small gate. Besides that, they irrigate some 15,000 or 20,000 acres of land in California, and then they take their water through under the river in a siphon and carry it on to the other side.

Mr. LITTLE. And you allow them to take water that way?

Mr. ROSE. Well, they have never been molested from doing it. They have no legal right to do it. Of course, they could not appropriate water in California and carry it for use to another State.

Mr. HAYDEN. You do not deny the right of the Federal Government to take water out of a navigable stream and put it on its own land?

Mr. Rose. I would where the act itself provided that nothing in the act shall interfere or be construed to interfere with the laws of the State or Territory regarding the appropriation and use of water, which the reclamation act does provide. I would certainly say they were violating the letter of the law in doing it; but nobody has ever raised the question, and I don't suppose it ever will be raised. Mr. HAYDEN. It would not do any good now, anyway.

Mr. ROSE. I don't think anybody desires to raise the question. The CHAIRMAN. As an interstate matter water is taken, for instance, on the Great North Platte project-North Platte in Nebraska and Wyoming-water is taken there and diverted way up the North Platte River in Wyoming and carried into Nebraska, and more land is irrigated in Nebraska than in Wyoming, but all the water comes from Wyoming.

Mr. HAYDEN. And nobody ever raised that question.

The CHAIRMAN. Without objection, gentlemen, we will adjourn now to meet at the call of the chair.

(Whereupon, at 9.45 o'clock p. m., the committee adjourned.)

COMMITTEE ON IRRIGATION OF ARID LANDS,
HOUSE OF REPRESENTATIVES,
Saturday, July 12, 1919.

The committee met at 10 o'clock a. m., Hon. M. P. Kinkaid (chairman) presiding.

The CHAIRMAN. The committee will come to order. Gentlemen, Director Davis is here and we are going to give him the right of way, because we all appreciate that he is very busy. Mr. Davis, the committee will hear you now.