The hearings were begun at 2 p. m. on August 13 in the auditorium of the Fallbrook High School, and lasted until 10 p. m. on the 13th, except for a 2-hour break for supper. On August 14 the hearings were resumed at 10 a. m. and were concluded at 1 p. m. The 9 hours of hearings were equivalent to 4 days of hearings had they been held in the usual manner in Washington where we can conveniently take only 2 hours a day for hearings. The manner in which arrangements for the hearings were made was outstanding and the local committee in charge deserves high praise for its assistance to the subcommittee. The steering committee for the local people consisted of Many other local people too numerous to mention made an "all-out" effort to help the subcommittee conduct the hearings with all possible ease and speed. Local organizations also assisted, notably the women's groups of the Methodist Church, the Catholic Church, and the Eastern Star. You will want a brief report, we are sure, on the interest shown in the hearings which you authorized. The large auditorium of the Fallbrook High School was completely filled most of the time, and because even standing room was not available for everyone, loud speakers were set up on the outside of the building so that the people who could not get into the auditorium were able to listen to the proceedings. The crowds of people coming to Fallbrook were so large that emergency lunch and dining rooms were set up by local church and lodge groups. INSPECTION OF AREA A short inspection tour of the area to see the difference between land with water and without water was sufficient to understand the "life or death atmosphere" which pervaded the hearings so far as the local people were concerned. We will not attempt to reiterate the testimony here, but you will be interested, we are sure, in the transcript of testimony which shows these small landowners were very pleased that a congressional subcommittee would come to California to hear their views. As the chairman said at the conclusion of the hearings, we feel that some inexperienced attorneys in the Justice Department do not fully realize the terrific impact that can be brought to bear when the Federal Government brings suit against an ordinary citizen. EXPLANATION OF COMMITTEE'S FUNCTION At the outset of the hearings the chairman made it clear that the function of the subcommittee was to learn first from the local people the position taken by the Federal Government with respect to their individual water rights and problems, and, second, why it is necessary to serve some 14,000 people, or whatever the figure may be, to settle the water rights of the Santa Margarita River. At the beginning of the hearings I also made it clear that the committee did not intend to interfere in any way with the court proceedings. In this respect the chairman pointed out the constitutional separation of powers between the executive, legislative, and judicial departments of our Government. He also mentioned, however, that the people had the constitutional right of petition when actions of the Government were unreasonable or burdensome. With that introduction the chairman explained that we would make recommendations to the Committee on Interior and Insular Affairs, and if the full committee agreed with the recommendations of the subcommittee, then these recommendations would be submitted to the executive departments. He also explained that in the final analysis the Congress could take legislative action which would be binding on the executive department. No executive department witnesses were called because we wished to devote all the time possible to the hearing of the local witnesses. LOCAL WITNESSES The subcommittee heard testimony from 29 witnesses, including 22 local landowners. Approximately 15 other witnesses were scheduled to testify, but time did not permit them to be heard. The witnesses who testified were as follows: G. E. Arnold, San Diego R. D. Elliott, Long Beach Mrs. Etta Hamilton, Fallbrook O. P. Heald, Fallbrook Harry Held, Fallbrook Evan Hewes, Imperial Valley Mrs. Mary Hubbard, Fallbrook Mrs. William Lattimer, Fallbrook Ruth Lillie, Fallbrook Judge Harry H. Smelser, Fallbrook Charles Stubblefield, Fallbrook Victor B. Westfall, Sr., Fallbrook Charles H. Wilding, Fallbrook Senator J. Howard Williams, Porterville The selection of witnesses by the local committee was done in such a way that our subcommittee obtained representative testimony in a short period of time. Introductory remarks were made by Mr. Raymond Wayman and Mr. O. P. Heald. Mr. Victor B. Westfall, Sr., a merchant and long-time resident of the area, outlined the Fallbrook area history for the members of the subcommittee. Mr. Evan Hewes, president of the Imperial irrigation district, spoke as a representative for all affected parties. The Fallbrook utility district was ably represented by Mr. George F. Yackey, chief engineer and general manager, and Mr. Phil D. Swing, attorney for the district. Mr. Swing's testimony was of particular value to the subcommittee and I shall report further on it in subsequent paragraphs. WATER USERS REPRESENTED Local landowners were called representing various categories substantially as outlined below: (a) Riparian owners on the Santa Margarita River. (b) People of the upper basin area. (c) Riparian owners using off-the-river wells with no other source of supply. (d) Appropriators using water under permit. (e) Owners of patented land. (f) Users who have no other source than the Fallbrook public utility district. (g) Utility district landowners who depend entirely on well water. (h) Utility district landowner who can use district services but depends entirely on local ground water services. (i) "Shotgun" action people who were served although they own no land in the Santa Margarita watershed or who don't own any land at all. (j) Owners who own land in the Santa Margarita River watershed but use water from the watershed of the San Luis Rey. Other witnesses were representing various organizations. Among these witnesses were Franz R. Sachse, former president of the Fallbrook utility district and former deputy director of public works for the State of California; J. J. Deuel, California Farm Bureau representative; and Arnold Klause, assistant manager of the San Diego Chamber of Commerce. It was a pleasure to also have the statements of Senator J. Howard Williams, chairman, and Assemblyman Ralph R. Cloyed, vice chairman, of the State legislative committee on water problems. HISTORY OF NEGOTIATIONS We referred earlier to the testimony of Mr. Phil D. Swing, former Member of Congress and attorney for the Fallbrook public utility district. Mr. Swing's testimony is especially valuable to the subcommittee because it documents the events that led up to the action of the Justice Department which precipitated the present controversy over the waters of the Santa Margarita River. From Mr. Swing's testimony the important documents and actions can be listed generally as follows: 1924: Fallbrook irrigation district (predecessor in interest of the Fallbrook public utility district) made a filing on waters in the Santa Margarita River. 1933: Fallbrook public utility district installed a pump in the Santa Margarita River and began continuous use of water from the river. October 4, 1946: Fallbrook public utility district made application to divert 21⁄2 cubic feet per second from Santa Margarita River. October 11, 1946: Fallbrook public utility district filed application No. 11587 for 10,000 acre-feet per annum from the Santa Margarita River (permit granted April 23, 1951). November 28, 1947: Fallbrook public utility district filed application No. 12178 for 10,000 acre-feet per annum from the Rainbow River, tributary to the Santa Margarita River. November 28, 1947: Fallbrook public utility district filed application No. 12197 for 10,000 acre-feet per annum from Sandia Creek, a tributary of the Santa Margarita River. February 18, 1948: State of California granted the application of the Fallbrook public utility district for the right to divert 21⁄2 cubic feet per second from the Santa Margarita River. June 30, 1948: United States Navy filed application No. 12576 for 165,000 acre-feet per annum to be impounded behind the proposed DeLuz Dam from which a safe yield of 12,700 acre-feet per annum was expected. 1948: (Negotiations were underway for a memorandum of understanding between the Fallbrook Public Utility District and the Departments of the Federal Government that were involved when the Navy's application for hearing was noticed. Mr. Swing attended his first conference regarding negotiations on November 17, 1948). January 13, 1949: Assistant Secretary of the Interior William E. Warne informed Mr. Phil D. Swing by letter that some agreement on the project for the Santa Margarita River was expected momentarily. January 27, 1949: An all-day conference of interested parties was held which resulted in a tentative agreement and drafting of a resolution. January 31, 1949: The board of directors of the Fallbrook Public Utility District unanimously adopted the resolution which had been drafted to represent the consensus of the conference. March 1949: Fallbrook Public Utility District entered a protest against Navy application No. 12576. March 15, 1949: Mr. Phil D. Swing received information in a personal letter indicating a bill had been drafted so the matter could be handled separately from the public works authorization. March 29, 1949: The Navy acknowledged the protest and said "the cooperation and interest of the Fallbrook Public Utility District in furthering the cause of the proposed multiple-purpose dam is appreciated, and it is sincerely hoped that the project will receive the early approval of Congress." May 4, 1949: Mr. Phil D. Swing, representing the Fallbrook Public Utility District, met with interested parties in Washington, D. C., to reach an agreement on the draft of the legislation. May 5, 1949: Mr. Swing and Congressman McKinnon met with Mr. Veeder and agreement was reached that the Fallbrook Public Utility District would "secure from the Vail interests a written waiver and consent that the Government might deliver from the DeLuz Dam, and from their share of the water, 7,500 acre-feet of water to Fallbrook and that Vail would never at any time claim that was a violation of the stipulated agreement." May 6, 1949: Mr. Swing and Congressman McKinnon presented a form of waiver to the Justice Department representatives and were informed the Justice Department would consider it and inform Messrs. Swing and McKinnon shortly of the Department's views. May 17, 1949, Mr. A. Devitt Vanech, representing the Justice Department, wrote a letter to Mr. Swing saying the matter had been discussed with the Navy Department and copies of the form of waiver had been forwarded to the Navy and Mr. Swing could expect to receive an acceptable form of waiver about May 25, 1949. June 9, 1949: Mr. A. Devitt Vanech, representing the Justice Department, informed Mr. Swing that "consideration has been given to the proposed communication [the form of waiver] and it appears adequate to cover the proposition discussed between representatives of your Department and representatives of this Department." July 16, 1949: Congressman McKinnon informed Mr. Swing by telegram that the proposed form of waiver for Vail had been approved by the Justice Department in a letter of the Navy Department. August 2, 1949: Memorandum to Admiral Manning by Willis R. Dudley regarding a conference of July 29, 1949, which mentions for the first time, in Mr. Swing's opinion, that the stipulated judgment between the O'Neills (Santa Margarita Rancho) and the Vails divided up all the water in the Santa Margarita River. (See transcript of testimony for details.) September 29, 1949: Congressman McKinnon reported that the objections raised with respect to the transmittal of the form of waiver for the Vails had been overcome and Mr. McKinnon said he would introduce the necessary legis lation for the multiple-purpose project as soon as the Navy Department and Interior Department had approved the draft of it. December 12, 13, and 14, 1949: Conferences were held at Camp Pendleton and is a result a memorandum of understanding was drawn up by the representatives of the interested parties who were present. December 22, 1949: Memorandum of understanding was transmitted by Capain Johnson to the Fallbrook Public Utility District. January 9, 1950: The Fallbrook Public Utility District approved and executed the memorandum of understanding between the Department of the Navy, the Fallbrook Public Utility District, the Department of the Army, and the Department of the Interior. January 11, 1950: Executed documents were transmitted to Captain Johnson. January 24, 1950: Congressman McKinnon wired Mr. Swing that the "San Diego agreement scheduled to be signed without change by Admiral Jelley tomorrow." March 20, 1950: Congressman McKinnon reported after several delays and inquiries "Agreement approved today by Chief of Naval Operations. Assistant Secretary must now approve and then Secretary Navy shouldn't be long." March 27, 1950: Congressman McKinnon informed Mr. Swing by letter: "I feel sure we will have the San Diego agreement ratified by Secretary of Navy before week is out and the Secretary of the Interior is all set to go as soon as we get the document over from the Navy." Mr. Swing's testimony indicated that following March 27, 1950, there were no communications or written documents stating the memorandum of understanding would not be approved by the Navy or the Justice Department until the complaint was filed on July 18, 1951, in the case of the United States of America v. the Fallbrook Public Utility District et al. TWO BASIC QUESTIONS At the opening of the hearing, the Chairman stated two basic questions which he hoped the hearings would answer. The first was the reason and the necessity for a suit of this magnitude involving as it did between 10,000 and 14,000 defendants. Nothing which developed in the hearings indicated the necessity or any good reason for bringing a suit involving thousands of small defendants with trifling or nonexistent water claims. Ninety percent of the water in the Santa Margarita River is used by less than 10 percent of the users. Consequently, it would be possible to get a practical definition of the water rights on the river by suing the 10 percent using 90 percent of the water. Suing the thousands of small defendants as the Government has done in this instance may give a technical and encyclopedic definition of the water rights. But, such a definition is of no practical value for the reason that not more than 90 percent of the flow in the watershed can be controlled anyway. The losses in a stream from transpiration, evaporation, and casual and insignificant diversions ordinarily amount to more than 10 percent. Therefore, no useful purpose is served by securing a legal and encyclopedic definition of water rights down to the last bucketful. It can be concluded, then, that the legal theorists in the Attorney General's Office have unnecessarily put the Federal taxpayers to great expense and the local people to great provocation and legal expense for no practical reason whatever. The second question stated by the chairman at the commencement of the hearing is whether or not the Federal Government asserts some right or claim in its sovereign capacity which could not be asserted by a private holder of the same purchase documents. It appears from the testimony that the Government is standing on its purchase documents, plus the stipulated judgment between the Vails and the O'Neills. The pleadings filed by the Government are subject to the interpretation that it asserts some claims in its sovereign capacity and for defense purposes, although this has been denied by the Government's attorneys. The Government apparently takes the position that the stipulated judgment between the Vails and the O'Neills divided the river and that the judgment was binding on everyone on the watershed even though other users on the river were not parties to the litigation. This is a novel legal theory, to say the least, but it would seem to indicate that the Federal Government is not asserting a higher position than a private holder of the same purchase documents could assert. However, it might be well to point out that in the testimony before the judiciary subcommittee of the House, the representatives of the Attorney General's Office indicated that they would assert the Federal Government's sovereignty against any claim of prescriptive use of water which might impair the Government's rights under its purchase documents. If this position is sustained by the court, a Federal agency on any stream in California will to that extent become a preferential user of water with preferential rights not subject to impairment by prescriptive use of water by others. NAVY MANEUVERS It is apparent from the testimony that the Navy does not come into the court of public opinion with entirely clean hands. The Navy had participated in the original negotiations with the Fallbrook Public Utility District, which culminated in the memorandum of understanding approved on December 14, 1949. From the negotiations it was apparent that the Navy was not only willing but anxious that the Army engineers, the Bureau of Reclamation, and the Fallbrook Public Utility District jointly undertake the necessary steps to build the reservoir contemplated at the DeLuz site. It was obvious that the Navy saw no chance of building the project itself at that time, and hoped to gain by the sponsorship of the project by the Bureau of Reclamation, the Army engineers, and the Fallbrook Public Utility District. After the passage of the omnibus defense public works bill, which in effect authorized the Defense Department to build anything it wanted to provided the construction was connected with a defense installation, the situation was quite different. The Navy saw the chance to build the project itself and to exclusively own and operate it. Thereupon, the Navy took advantage of the technical machinations of the legalists in the Attorney General's Office as a convenient method of escape from an agreement mutually and openly arrived at. This was nothing more or less than Federal interagency power politics in the raw. CONSTRUCTIVE APPROACH REQUIRED As we developed the testimony during the hearings it became apparent that not enough water could be available to meet all of the requirements of the Federal Government and the needs of the rapidly growing local area unless the floodwaters of the Santa Margarita River could be controlled and put to beneficial use. Therefore, we endeavored to take a constructive approach to the problem, bearing in mind that litigation over limited water supplies doesn't make new water available. During the hearings we also kept in mind a major issue in the hearings which dealt with the right of the Federal Government to take water for its use without regard to the laws of the State which pertain to water rights. |