Mr. ROSE. Yes. For instance, if this levee broke, the first land that would be flooded would be this 30,000 acres in here [indicating]. The next land that would be flooded would be this 150,000 acres in here [indicating]. And, of course, it would naturally accumulate as it went on down. There was a break in 1913 that did cover this 30,000 acres [indicating]. But, fortunately, it broke at a point where it did not do very great damage, and gradually it went off. They repaired the damage; and the repair bill was put up to us. In fact, they brought suit against us and tried to make us settle. But we claimed it was no part of our duty to take care of that. The CHAIRMAN. So that the American citizens owning lands in Mexico pay nothing for those levees?

Mr. ROSE. No.

The CHAIRMAN. In order to protect their own lands?

Mr. ROSE. That is correct.

Mr. SINNOTT. What is your acreage, and what is their acreage, Mr. Rose?

Mr. ROSE. Our maximum irrigated acreage north of the line is 450,000 acres.

Mr. SINNOTT. And what is theirs?

Mr. ROSE. Theirs is 190,000 acres.

Mr. LEATHERWOOD. You speak of what the effect of breaking those levees would be. Does that water spread out over that country very rapidly after the levee breaks?

Mr. ROSE. Yes, it does. It depends largely, of course, on where it is. It was fortunate that that break occurred just where it did. If the levee had broken down here [indicating on map] the whole Colorado River would have come in on those lands; but fortunately it broke at a point where there was only six or eight feet of pressure against the levee; and what we did was to immediately send two or three hundred men in there, who filled sacks with dirt and threw them in there; and of course, as the river went down, the danger became less; and it was all repaired. But if the break had come in another place in the levee the damage would have been very great.

Mr. LEATHERWOOD. Do the floods on those lands leave them in a better or a worse condition, as to fertility?

Mr. ROSE. In fertility, it does not hurt the land. If the land had been cropped a good deal, it would hurt it; and if it was new land it would just add a few inches of silt; but it does not make any difference, because it is all silt.

Mr. LEATHERWOOD. The deposit is not such that it injures the land?

Mr. ROSE. No; all of that country is silt country; you can take it. between your teeth and you do not get any grit; it is just a floury silt; that is all.

Now, here is an instance of how the thing works, on this levee here [indicating on map]. The last work that the Imperial irrigation district had under contract was with the firm of Sherer & Crowley, who went in there [indicating] and did some work. And we have a quarry down there [indicating], which was opened up under necessity. Our big quarries are over here [indicating]. The last large shot in there was 110,000 pounds of dynamite at one

shot; but we have also opened up a quarry here [indicating] that cost hundreds of thousands of dollars; and we have built a track up there for bringing that rock down to the levee. And they left a lot of their equipment down there that they did not want to move: and it might have been of some help to us, but they left it in there: and finally the officers notified us to move it; and we notified Sherer & Crowley that the officials were complaining about it; and it went on for awhile, and they finally notified us that they had placed a fine against that equipment of $7,000, because it was there. was doing no harm at all.

Mr. LEATHERWOOD. You say they placed a what?

It

Mr. ROSE. They placed a fine of $7,000; and we took it up with the officials at Mexico City, and they urged us to pay it; and we said, "We have nothing to do with it: it was left there by Sherer & Crowley, and it is doing no harm there; there is not a human being living within 10 miles of it." And so that matter went on for a time; and we have to maintain, under the Mexican concession, warehouses, and keep all of our supplies in Mexico; because the processes are so slow that we can not afford to wait and take the time to get the supplies in there as needed. So they seized all our warehouses and equipment and all of our offices and ran our guard off; and then they came over to our American office and demanded that we surrender the insurance policy on those things. They actually asked us to give them the insurance policy; and our Mexican manager said, "No, that would be burned up inside of 24 hours if you assigned them the insurance policv." And we fought that: and finally we had to make a deposit of $7,000 in gold in Mexico City; and it is still down there: we have not got it.

Mr. RAKER. Do you have to pay a royalty on this rock that you use in this quarry at Volcano Lake?

Mr. ROSE. No; but we have to pay $10 on every trainload that we take in from the American quarries, and sometimes we are running three months in the year.

The CHAIRMAN. What is the acreage cost for the operation and maintenance of your system?

Mr. ROSE. The operation and maintenance cost is about $7 an acre. On the Mexican side it is probably about half of that.

Mr. SWING. Is that tariff also applied to the rails and equipment that is used to protect the levee and to protect the American lands? Mr. Rose. It does. We have paid $200,000.

Mr. RAKER. And as to this all-American canal, your idea is that that should be built by the Government, and that these people will repay it, with a reasonable rate of interest?

Mr. ROSE. Yes. The idea is this: That the canal coming through here [indicating on map] was estimated to cost $30,000,000 in 1918. Mr. HUDSPETH. How much?

Mr. ROSE. $30,000,000, and the commission at that time said that. of course, was the time of highest prices in the history of the world. We have had estimates by P. M. Munn, of Denver. as low as $10.000.000.

Mr. RAKER. That is the red dotted line on that map [indicating] that goes from Laguna Dam on to Calexico?

Mr. ROSE. Yes: well, it goes on west of that.

Mr. RAKER. Yes. And the idea is that it is to be constructed under the supervision of the Government?

Mr. ROSE. Yes.

Mr. RAKER. The money is to be advanced, and to be repaid in either 15 or 20 installments, with interest?

Mr. Rose. With interest. There is now under that canal, actually under cultivation, probably 450,000 acres in the Imperial Valley and about 12,000 acres in the Coachella Valley, and those lands are now producing annually probably twice as much as the cost of that canal. It is very similar to the Phoenix project. When the Government started to build the Phoenix project they had about 120,000 acres under cultivation. They spent $14.000.000, which is being repaid according to agreement. But the assets were there, and the assets are here, and all we are doing is to ask the Government to advance the money, and it will be repaid with interest.

Mr. RAKER. Would the all-American canal, in addition to irrigation, eliminate the question of flood control?

Mr. ROSE. No; it would not. There is only one thing that would eliminate flood control, and that is the Boulder Canyon Dam. Mr. RAKER. You will discuss that later?

Mr. ROSE. Yes.

Mr. SINNOTT. Well, would the canal be fully serviceable to your district without the construction of a dam at Boulder Canyon or elsewhere?

Mr. ROSE. Yes; we could get every drop of water that we can get now without any storage. Yes; it would, absolutely. It would serve our district for other purposes without that, so far as any canal possibly can serve us.

There is one situation, however, that I should refer to, and that is this: That, of course, including the water south of the line, I might say four times in the last six years the valley has diverted every drop of water out of the Colorado River.

Mr. RAKER. The all-American canal, without control above Laguna Dam, would not in the least affect the danger from flood control, would it?

Mr. ROSE. Not a particle.

Mr. RAKER. That is, the danger from overflow?

Mr. ROSE. No; it might possibly increase it.

Mr. LEAVITT. Hou much should be paid an acre for the land on the Mexican side, instead of 85 cents?

Mr. Rose. If you take them in as a part of the system, which operates as a nonprofit municipal corporation, then they should pay the same as the American lands, $7. Under the concession, however, which is granted to the private corporation, they are entitled to a dividend, the same as anybody else should be allowed to get it. But nobody down there has contributed anything. American capital built it. But at least, if they never did anything more, they should pay their just proportion of all the cost. But when it comes down to the question of what we are entitled to, we are entitled to a dividend, the same as any other private concern.

Mr. SINNOTT. How do you allocate their proportion?

Mr. ROSE. We take the amount of money we receive, and we take the amount of moneys expended, on the things that they derive a benefit from, contributed by us, and allocate it in that way.

Mr. SINNOTT. Do you take the ratio of their lands?

Mr. ROSE. No. In other words, if we start in at this point [indicating], and 35 per cent is received by their lands over here [indicating], delivered at the international boundary line, we claim that they should pay 35 per cent of the cost of the operation of the district, which up to very recently has been nothing, except for the main canal, protection works, and things like that. In all of these improvements they have been the first receivers of the benefit, and we claim that they should pay according to the waters received. Mr. HAYDEN. If the all-American canal were built, it would not change the necessity for maintaining levees in Mexico?

Mr. ROSE. No. It would probably increase the hazard if you built them. And that is one reason why the whole thing should go together.

Mr. HAYDEN. Suppose the all-American canal were built, and yet it was necessary to repair the levees, the Mexicans would act in the future as they have in the past, they could prevent the Imperial Irrigation District from repairing the levees in Mexico until they had some understanding as to what quantity of water would be allocated to the Mexican lands?

Mr. ROSE. Here is the situation: To-day they have the gun against our heads. If the all-American canal was built, and they had to depend on us for their water, we would have the gun at their heads. and they would have to deal fairly with us. To-day they have got us, and we have to do what they say: we do not dare to holler, because they could shut off our water; and if they did that, in a week at the outside, the people of Imperial Valley would have to leave there, and their stock would perish. So that they have got us "dead to rights."

Mr. SINNOTT. If the Boulder Canyon dam were built, that would relieve you of the levee problem?

Mr. ROSE. If the Boulder Canyon dam was built, and the allAmerican canal was built, we would be perfectly free of Mexico. because the levees that are now there would probably take care of whatever might happen for all time under those circumstances.

Mr. HUDSPETH. If the Boulder Canyon dam were built, then the Mexican farmers on the south side of the line would be compelled to pay their just proportion, would they not?

Mr. ROSE. If the canal was built, yes; otherwise, no.

Mr. HUDSPETH. I say, if the all-American canal and the Boulder dam were built?

Mr. ROSE. Yes.

Mr. HUDSPETH. But if the canal was built without the Boulder dam, you would not have the whip hand?

Mr. Rose. We would have on the water question, but we would not have the flood protection. And I do not want to live down there unless something is done for the flood protection, because your life is in danger down there. I will sav to the committee that two things prevent the valley from going on as it is. I do not believe that the valley without the construction of the reservoir can possibly survive 20 vears.

Mr. RAKER. Suppose the all-American canal was built and the Boulder Canyon dam, would not your people be under the necessity of maintaining your works in Mexico now?

Mr. ROSE. No.

Mr. RAKER. They could allow those banks to deteriorate, and that water would go down and ruin you just the same, would it not? Mr. ROSE. The big floods, the floods on the Colorado River, which are the long, heavy floods, would be cut off. The floods of the Gila River, which are flashes, would still come down there; but their floods are short, as a rule, and the protection down there, unless they went in and destroyed the levees, would take care of that. And at least, they would be the first sufferers: and the chances are that the floods of the Gila River would never reach the American lands, and would be of only two or three days' duration. The average discharge of the Gila River is only 1,000,000 acre-feet a year; and if they should get a flood, it would be largely consumed and stopped on their lands; so that they would be the ones to suffer, or, at least, the first ones to suffer. And consequently they would be in the position of having to ask us to help them, rather than our having to get down on our knees to them because they would be the first people to suffer from any disaster that might happen there.

Now, there is another thing: These things are not physical, but they cause a lot of trouble in the operation of a system in a foreign country. We for a great many years have been paid in Mexican money for our water; and there is no safe place to put money in Mexico-bandits and everything else. So we have been bringing our money over for years and depositing it in American vaults, and taking it back gradually to pay to our Mexican employees. A short while ago they got short of money down there and one of our treasurers had $4,000 bringing it across the line; and they kept that money-confiscated it-and said it was transporting money out of Mexico against the law. That is the custom of every man in Mexicali-saloon men, gamblers, and everybody else-to deposit their money on the American side. Yet they kept that money and confiscated it. We fought that for a long time and sent our local attorney to Mexico City: and finally we did make them release that money. But they did confiscate it.

Now, those are the things that constantly get under your skin when you are operating in a country like that.

Mr. RAKER. Were those bandits that confiscated the money?

Mr. ROSE. Yes; they were bandits; but they had the approval of the Mexican Government on it. They are all bandits down there. [Laughter.]

Mr. SINNOTT. They were legitimate bandits?

Mr. ROSE. Yes: according to Mexican law.

Mr. LEATHERWOOD. You have not called that situation to the attention of Mr. Wayne Wheeler, have you?

Mr. ROSE. I want to say that I do not know Mr. Wheeler; but I know the conditions down there, and I know them very well; and I have read his report; and I want to say to you gentlemen that, knowing the ground down there, and knowing all about Mexicali, and having to go there many times, and maintaining an office and warehouse there that I think Mr. Wheeler did not exaggerate conditions at all. We have a rule among our employees in the district that any man that is caught gambling over there will be discharged; and we have to keep a man to watch them. And within