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ALL-AMERICAN CANAL IN IMPERIAL AND COACHELLA
VALLEYS, CALIF..

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COMMITTEE ON IRRIGATION OF ARID LANDS,

HOUSE OF REPRESENTATIVES,

Wednesday, July 9, 1919.

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

The CHAIRMAN. Gentlemen, we have this morning for consideration the Kettner bill (H. R. 6044) relative to the Imperial Valley, Calif., irrigation district, which bill is as follows:

[H. R. 6044, Sixty-sixth Congress, first session.]

A BILL To assist in increasing the productive agricultural area of the Imperial and
Coachella Valleys, California, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That all unentered public lands of the United States in Imperial Valley and Coachella Valley, California, found by the Secretary of the Interior to be susceptible of irrigation from the canals the construction of which is provided for by section 6 hereof, shall be offered for sale by the Secretary of the Interior at $10 per acre, plus the $1.25 per acre Government charge under the desert land laws, for cash, or on deferred payments, at the option of the purchaser, one-fifth cash and the balance in four annual installments bearing interest at the rate of 6 per centum per annum from date of sale, patent to issue upon full payment of purchase price and upon proof of satisfactory water right therefor: Provided, That no purchaser shall be permitted to purchase more than one hundred and sixty acres under the provisions of this act: Provided, further, That any person having a valid entry upon lands similarly situated but not patented may, at his option, acquire title under this act by proof of satisfactory water right and upon the payment of the $10 per acre mentioned in this section, plus any Government charge remaining unpaid.

SEC. 2. That all moneys derived from the sale of the lands mentioned in the first section hereof in excess of the Government charge of $1.25 per acre shall be deposited in the Treasury of the United States in a special fund to be known as the "bond guaranty fund," to guarantee the payment of the principal and interest of bonds to be deposited with the Secretary of the Treasury as hereinafter provided. No privately owned lands whose reclamation has been made possible by the construction of the irrigation works hereinafter provided for shall be permitted to benefit by said works until said lands shall have first paid into the Treasury of the United States to the credit of the bond guaranty fund the sum of $10 per acre.

SEC. 3. That when the Imperial irrigation district and such other irrigation districts or county water districts as now are or may be organized under the laws of the State of California for the purpose of irrigating the lands referred to in the first section hereof shall have duly voted and issued bonds bearing interest at a rate to be fixed by the Secretary of the Interior, not to exceed 5 per centum per annum, in sufficient amount to cover the cost of the construction of the canals and works described in section 6 hereof, as estimated by the Secretary of the Interior, and the legality and validity of such bond issue or issues shall have been duly confirmed by the courts in the manner provided by the State laws of California, the Secretary of the Interior is authorized and directed, when he shall have found the irrigation project of said district or dis

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tricts to be feasible and the bonds offered not disproportionate to the security which will exist upon the completion of said canal, to accept such district bonds and deposit the same with the Secretary of the Treasury, who shall collect the principal and interest thereof and apply the same to the payment of the principal and interest of the certificates of indebtedness hereinafter authorized.

SEC. 4. That upon the receipt by the Secretary of the Treasury of such district bonds he shall issue certificates of indebtedness of the United States in amount equal to the face value of such district bonds and bearing interest at the same rate in such form as he may prescribe and in denominations of $50 or multiples thereof, the principal and interest to be payable in gold coin of the United States, the principal and interest thereof to become due not less than sixty days after the due date of the principal and interest of the corresponding district bonds, respectively. Such certificates of indebtedness shall run for the same period as the corresponding district bonds, not exceeding, however, forty

years.

SEC. 5. That from time to time, as funds may be required for construction purposes, such certificates of indebtedness shall be disposed of by the Secretary of the Treasury under such rules and regulations as he may prescribe, giving all persons an equal opportunity to subscribe therefor, but no commission shall be allowed, and the aggregate issue of such certificates shall not exceed the amount of the district bonds deposited with the Secretary of the Treasury, and the proceeds from the sale of such certificates of indebtedness shall be deposited in a special fund to be known as the "project fund." to and for the credit of the district or districts, respectively, issuing said bonds, to be used by the Secretary of the Interior in constructing the canals and necessary works as provided in section 6 hereof.

SEC. 6. That any and all moneys that may at any time hereafter be in the Treasury of the United States to the credit of the project fund are hereby appropriated for carrying out the objects and purposes of this act. The Secretary of the Interior is hereby authorized and directed to expend such moneys for the construction of a canal and necessary works, entirely within the United States, connecting the present irrigation system of the Imperial irrigation district with Laguna Dam, substantially in accordance with the plans and specifications of the joint survey made by the United States and the Imperial irrigation district under the contract entered into by them February 16, 1918, said canal to be of sufficient size and capacity and of proper construction to supply all lands within the present boundaries of the Imperial irrigation district, as well as all other lands within the United States susceptible of practical reclamation by gravity flow from aid canal, for which lands bonds have been voted, issued, and accepted as herein provided within a time limit to be set by the Secretary of the Interior, and also for the construction of a main line canal and necessary works connecting said above-described canal with any other district or districts whose bonds have been filed with and accepted by the Secretary of the Interior under this act; said canal to be of sufficient capacity to irrigate the arid lands within said districts susceptible of practical reclamation by gravity flow from said canal.

SEC. 7. That each district shall bear its proportionate cost of the construction of the canal or canals and necessary works serving such district, and that the proportionate amount to be paid by each of said districts for the construction of the canal or canals and necessary works above described shall be fixed and determined by the Secretary of the Interior, and shall be based upon the number of acres in each district susceptible of practical reclamation by gravity flow from said canals, and such district or districts shall issue their bonds in the amount so determined by the Secretary.

SEC. 8. That should a surplus remain from the proceeds of the sale of such certificates of indebtedness issued in connection with said project after the construction of the canal and works provided for in section 6 hereof, such surplus shall be credited as payment of interest on the bonds held by the Secretary of the Treasury on account of such project until said surplus is exhausted.

SEC. 9. That if the bond guaranty fund shall be diminished by the payment under the provisions of this act of the obligations of any district, proceedings may be at once instituted by the United States Government, or any district interested in said bond guaranty fund, to compel the defaulting district to meet its obligations, and the money so collected shall be returned to said bond guaranty fund. When said bond guaranty fund shall have served its purpose of guaranteeing the payment of the district bonds accepted by the Government

under this act it shall be applied upon the payment of the last bonds held by the Government hereunder. The funds shall be applied as nearly as possible to the payment of the bonds of the respective districts in the proportion the money was derived from the lands within said districts.

SEC. 10. That the certificates of indebtedness herein authorized shall be exempt from taxes or duties of the United States as well as from taxation in any form by or under the State, municipal, or local authority, and a sum not exceeding one-tenth of 1 per centum of the amount of the certificates of indebtedness issued under this act is hereby appropriated out of the said bond guaranty fund to pay the expense of preparing advertising, and issuing the same: Provided, That the said bond guaranty fund shall be reimbursed for such expenditure out of the proceeds of sale of such certificates of indebtedness.

SEC. 11. That the unpatented lands of the United States within the limits of any district whose bonds are accepted by the Secretary of the Interior under this act shall be subject to the provisions of the act entitled "An act to promote the reclamation of arid lands," approved August 11, 1916 (Thirty-ninth Statutes, page 506).

SEC. 12. That all lands outside of the present boundaries of the Imperial irrigation district reclaimed by means of the irrigation works constructed hereunder shall have a water right secondary to that of the lands within the present boundaries of the Imperial irrigation district.

Mr. Kettner is here, the Imperial Valley irrigation district being in his district, and wishes to be heard, and I am sure we all want to

hear him.

STATEMENT OF HON. WILLIAM KETTNER, REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA.

Mr. KETTNER. Mr. Chairman and gentlemen, I have here a list of the men who are representing the different water systems of the Imperial Valley: Phil Swing, judge El Centro; W. H. Brooks, chairman of the board of supervisors, Imperial County; Fred Lack, of Brawley, banker and president of one of the water companies; Mark Rose, of Holtville; J. C. Allison, engineer of Calexico, representing also the Palo Verde irrigation district: Mike Leibert, of Seeley; and O. N. Shaw, banker of Holtville, president Wool Growers' Association of Imperial Valley.

I have carefully read of the report of the Secretary of the Treasury regarding his views on this bill, and I hope to be able to convince the committee that while his views, in general, might be good, this bill is the exception to the rule. I think I will be able to convince the committee by congressional actions of the past that all of the executive officers from the President down to the different committees have made this valley the exception to the general rule, and I hope the committee will bear that in mind.

Mr. WELLING. Mr. Kettner, was it your purpose to put the Secretary's communication in the record?

Mr. KETTNER. No; not unless the committee sees fit to do so.

Mr. TAYLOR. Mr. Chairman, the bill itself ought to go into the record and the report of the Interior Department, if there is one, and if not, there ought to be one, and then the report of the Treasury Department following that report, because we want to make a complete record here.

Mr. KETTNER. Very well.

Mr. WELLING. Some of us have not seen the report.

Mr. TAYLOR. I have not seen the report and I do not know a thing about it. Mr. Kettner, I wish you would be a little more elementary

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