you believe there would be a majority of them that would pay that added cost for the water through this canal?

Mr. CRAWFORD. I believe there would be two-thirds of them, easily. Senator KENDRICK. You have no information on that?

Mr. CRAWFORD. No, I don't know; I was just talking with the different farmers; I haven't found a farmer, I haven't talked with a farmer in this valley-and I live right here that is opposed to it, a regular farmer.

Senator KENDRICK. The evidence as indicated to the committee seems to have failed to reflect the actual attitude of the landowners. The CHAIRMAN. Thank you. Mr. S. H. McIver, secretary of the Imperial irrigation district.

STATEMENT OF S. H. McIVER, SECRETARY OF THE IMPERIAL IRRIGATION DISTRICT

Mr. McIVER. My name is S. H. McIver, secretary of the Imperial irrigation district. I wish to submit a statement.

The CHAIRMAN. Are you a resident of this valley?

Mr. McIVER. Resident of El Centro, Calif., and Imperial Valley. The CHAIRMAN. You are a landowner?

Mr. McIVER. Yes, sir.
The CHAIRMAN. Farmer?
Mr. McIVER. No. sir.

The CHAIRMAN. What extent are your holdings?

Mr. McIVER. Forty acres.

The CHAIRMAN. Is it under this system of irrigation?

Mr. McIVER. Yes, sir.

The CHAIRMAN. What is your occupation?

Mr. McIVER. Secretary and treasurer of the Imperial irrigation. district. The Imperial irrigation district at the present time receives all of its water for irrigation and domestic use by sufferance of a foreign country. There are no treaties between the United States and Mexico affecting the use of these waters for irrigation or domestic purposes. Therefore, when the water which is diverted. in California crosses the international line into Mexico all jurisdiction thereof is completely lost. To make possible the irrigation of Imperial Valley a Mexican corporation was formed which, in 1904, obtained a concession from Mexico, giving it the right to receive the water at the international line and reconvey the same back into the United States, provided that "enough shall be used to irrigate the lands susceptible of irrigation in Lower California with the water carried through the canal or canals without in any case the amount of water used exceeding one-half of the volume of water passing through said canals."

While this instrument is commonly referred to as a concession, and which it may properly be, in effect, it is nothing more than a contract, for a violation of which the Mexican corporation, the stock of which is held by the directors of the Imperial irrigation district, would have a claim against the Mexican Government for damages. The corporation is chartered under the Mexican laws and is prohibited from complaining to the Government of the United States against any treatment or wrong done it by the Mexican Government. In other words, here is a community of 55,000 people and property

values of $100,000,000 wholly dependent upon the good faith of Mexico for its existence.

The construction of the heading or intake and the annual construction of the weir for the diversion of water in the United States is for the benefit of Mexico as well as Imperial Valley. Yet the cost has fallen wholly upon the American farmers. The Imperial irrigation district has expended $2,937,452.34 in the construction and maintenance of a protective levee system 76 miles in length with more than 50 miles of standard-gauge railroad. In addition to this sum the original company and other agencies expended several million dollars. This is for the benefit of Mexican land as well as our own, and yet the Imperial irrigation district has paid more than $200,000 in Mexican duties, brokerage, and counsel fees in the construction and maintenance of its works in Mexico. In addition to that, the Mexican corporation, controlled by the Imperial irrigation district, has been required to and has paid taxes and fines to the Mexican Government to the amount of more than $30,000. The only part of this expense borne by the Mexican land has been 50 cents per acre-foot for water service up to and including 1916, and 86 cents per acre-foot since that time.

In a letter from Mr. Cronholm, chief engineer of the district to the Secretary of Agriculture at Mexico City, dated December 28, 1920, and covering the period from August 1, 1920, to December 31, 1921, the expense of flood protection in Mexico and for operation and upkeep of diversion works and irrigation structures and facilities of the Mexican corporation is placed at $3,646,888.96. Based on water sales in Mexico, the Mexican lands paid $677,390.93, less than their just proportion.

A petition by Mr. C. N. Perry, chief engineer of the district to the Secretary of Agriculture and Fomento, dated June 12, 1919, states that from February 21, 1916, the Mexican corporation had spent more than $1,000,000 in protective work along the Colorado River, and before this the original company had spent more than $1,800,000; that the duties of importation paid until January 1, 1918, amounted to more than $50,000 and that the amount from January 1, 1918, to the date of the petition was close to $15,000; that the Mexican corporation had been charging 80 cents national gold for each 1,000 cubic meter of water delivered when the actual cost to the Mexican corporation during the year was more than $1.75 national gold.

Whatever may be argued as to revenue derived from the sale of water in Mexico it must be recognized that Mexico never has paid its just proportion of the cost.

There are three different bases on which the distribution of charges between the United States and Mexico might properly be computed:

First. To consider all of the basin north and south of the international boundary line as one project and allocate the cost, based upon the percentage which the water used on each side of the international line bears to the whole amount used.

Second. Based upon the concession, treat the portion of the basin north of the line and that south of the line as two separate areas, each bearing one-half of the cost; and

Third. Consider the whole system as owned by Imperial irrigation district, and the Mexican water users simply as customers.

In any treatment an attempt must be made to eliminate from consideration the costs on the American side which do not in any wise affect Mexico, such as the distribution of water to the farmer as practiced on the American side, but not practiced by the district. on the Mexican side, and the interest on bonded indebtedness for the absorption of the mutual water companies and for drainage.

It will further be borne in mind that in any treatment for the year 1924 no great degree of accuracy can be attained by reason of the fact that the whole system was handled as a unit, and there is no way to know to a certainty just the cost of delivering water to the farmers for the purpose of subtracting from the whole, but with this limitation in mind it is possible to arrive at a reasonably accurate conclusion based upon the annual report of the chief engineer for

1924.

On the first proposition, treating the whole basin as one unit, we have:

Expense of board of directors__

General expense at Calexico headquarters.
Diversion.

Water distribution

River protection.

Real estate, building equipment, and facilities_

Bond interest on bonds other than the fourth issue for absorption of mutual water companies and drainage__

The cost of the canal system and protection works amounts to $12,913,281.46. A very large part of this sum is for structures which depreciate rapidly. The depreciation on the canal itself would not be so great. It would seem, therefore, that a depreciation charge on this property of 4 per cent would be eminently fair to Mexico. or a total amount of $516,531.25. The district owns equipment and facilities, including dredging machinery, locomotives, cars, automobiles, trucks, livestock, etc., valued at $1,707,461.77. This equipment depreciates at least 10 per cent per annum, or a total of $170,746, or a total for depreciation of $687,277.25, or a grand total properly chargeable to the whole system of $1,899,861.04.

Page 34 of the annual report shows the water deliveries. In the United States the amount of water delivered was one acre foot for each dollar received, or 1,039,657 acre-feet. In Mexico the acre-feet delivered is not the same as the number of dollars received because of the fact that the water users in Mexico pay 86 cents per acre-foot instead of $1 as on the American side. In other words, the $532,417.88 received from Mexico represents water delivered in the amount of 619,067 acre-feet, or a total of 1,658,724 acre feet, of which Mexico received 37 per cent. On this basis, Mexico to have paid its proper proportion of the cost should have paid the sum of $702,948.58, as against the $532,417.88 which it did pay, leaving a deficit of $170,530.70.

This set up does not include any of the canal operations in the United States. If the United States is to share in the canal operations in Mexico there is no doubt on this basis Mexico should share in the operation of the canals in the United States. The operation of all of the canals in the United States amounted to more than $1,000,000 in 1924. If a segregation could be made of the operation of the main canals and the delivery to the farmers it would undoubtedly add to this deficit in the neighborhood of $200,000.

On the second basis to be considered, we find this condition:

The concession under which the district receives its water through Mexico provides that enough water "shall be used to irrigate the lands susceptible of irrigation in Lower California, with the water carried through the canal or canals without in any case the amount of water used exceeding one-half of the volume of water passing through said canals."

Under this concession Mexico is entitled at all times to one-half of the water, and at times the water users in Mexico have actually taken one-half of the water, and it would be cheaper for the district in the maintenance of its headworks and main canals if Mexico at all times took one-half the water inasmuch as the canals flowing at capacity are cheaper to operate than when they flow with fluctuating heads, on account of silt deposit. In other words, the district must hold itself in readiness to deliver one-half of its full capacity to Mexico. Therefore, it would seem perfectly fair that Mexico bear one-half the expense, eliminating the expense rurely local to the United States. On this basis the same figures can be used as in the previous set up. It will be borne in mind that we do not consider the canal operation or maintenance in the United States a rart of which might very properly be considered, which arrlies also to this theory of the situation. On the one-half basis Mexico should have paid in 1924, $949,930.52, as against the $532,417.88 actually raid, leaving a deficit of $417,512.64.

Mr. Chandler, in his "The Other Side of the Question," says that the Colorado River Land Co., which is the largest owner of land in Lower California, "is a customer." Treated from that angle, we have this situation: The Imperial irrigation district had a capital investment of $16,679,850.62, on which the district, if it were a public utility, would be entitled to earn 8 per cent, or $1,334,388.04. The cost of operation for 1924 was $4,330,705.69.

In other words, had the district been a public utility it would have been entitled to earn $5,665,092.73 in 1924. From this sum we will, for the sake of fairness, subtract the whole of the cost of the canal maintenance in the United States, amounting to $1,067,908.16. Also the cost of drainage in the United States in the amount of $568,801.21; also the bond interest on the 4th issue bonds, amounting to $357,477.50, or a total deduction of $2,911,687.86, which leaves Mexico receiving the same identical service that the water users in the United States receive, leaving Mexico to pay 37 per cent of the income of $2,753,404.87. In other words, if Mexico is simply a customer of the Irrigation District, which is a public utility, then Mexico should have paid $1,018,759.80 as against $532,417.64, leaving a deficit of $486,342.20.

To recapitulate, for 1924, if the whole system is treated as a unit, Mexico lacked $170,530.70 of paying its just proportion. If taken under the terms of the concession and each party pays its one-half then for the year 1924 Mexico lacked $417,512.64 of paying its just proportion, and if Mexico is treated as a customer and the Irrigation District as a public utility, then for the year 1924 Mexico lacked the sum of $486,342.20 of paying its just proportion.

In the foregoing statements, it will be borne in mind, that canals and structures are maintained in Mexico purely for use in Mexico and yet not considered. If it were practicable to equitably divide

this cost the total deficits would be materially increased. If Mexico were not using water from the canals the maintenance would be negligible. In that event there would be no checks in the canals and the canals would sluice themselves deep into the ground and this would not only be virtually no maintenance cost but there would be little loss of water by seepage and incidentally little water added to the underground flow requiring drainage lower down in the United In fact, if water were not used in Mexico, all except the main canal would be abandoned. These items, while hardly tangible, are quite material.

The drainage in the United States is wholly eliminated from the computations, and yet drainage is required only because of irrigation and other uses of water. It is elementary that underground water, like surface water, continually seeks the lower elevations, and all the lands and canals in Mexico are at a higher elevation than the lands in the district. There is no doubt that a portion of the ground water which the district is required to remove by drainage is contributed by Mexico. The lands slope from a cone 30 miles south of the international line northward, and yet it is quite noticeable that a major portion of the district drains are in the upper or south end of the district. Five of the main drainage canals either begin at the international boundary line or within 1 mile thereof, and yet no part of the drainage or the interest on drainage bonds is charged to Mexico.

Senator DILL. Mr. Chairman.

The CHAIRMAN. Senator Dill.

Senator DILL. How much land is irrigated, Mr. McIver, out of this canal by people in Mexico?

Mr. McIVER. About 200,000 acres.

Senator DILL. How much land is irrigated out of the canal by people in the United States?

Mr. McIVER. About 400,000 acres.

Senator DILL. Then they irrigate about one-third of the total amount irrigated by the canal?

Mr. McIVER. Yes.

Senator DILL. So that your figures of 37 per cent would be a fair payment by the Mexican water users?

Mr. McIVER. Yes.

Senator DILL. That is all.

The CHAIRMAN. That is all, Mr. McIver.

STATEMENT OF EDWIN E. FORRESTER, FARMER

Mr. FORRESTER. My name is Edwin E. Forrester.

The CHAIRMAN. Are you a property owner?

Mr. FORRESTER. Yes, sir.

The CHAIRMAN. And have you been for a great many years?

Mr. FORRESTER. Well, I came here in 1901.

The CHAIRMAN. What is the acreage you farm?

Mr. FORRESTER. Well, I have been handling, my boys and me, about 800 acres; we own that much.

The CHAIRMAN. Has it a water right?

Mr. FORRESTER. It did have; we sold it to the irrigation district. The CHAIRMAN. Do you irrigate your farm?