it exists and it has become a practical thing, because in the Winters" case they decided that beneficial use did not prevail.

Mr. BURGES. We are going to be entirely frank with the committee and this is one of the reasons: Mr. Hudspeth told the committee that I would undertake to say during the hearings why we thought the United States Government could do certain things with this project which we of Texas can not do. That is one of three reasons. One is that the State of Texas has no power to construct a reservoir in the State of New Mexico; though there is no doubt that the United States Government has. It has done so elsewhere.

Mr. ARENTZ. The State of Nevada has that right. We got permission to do so.

Mr. BURGES. We have been told that we could get that permission. We would have permission if the compact to which I have referred had gone through without that reservation. The Governor of New Mexico vetoed the action of his legislature, but not on account of any bearing it had on the State of Texas. They were agreed with the State of Texas, but because it jeopardized existing rights at Roswell and Carlsbad rather than because of any effect it had on the State of Texas.

The middle basin of the Pecos was threatened by an unlimited storage, theoretically at least, in the upper part of the Pecos. The Governor of New Mexico vetoed the action of the legislature in ratifying it.

There is some reason to believe, as Mr. Hudspeth has told you, that when the Legislature of New Mexico again convenes the compact will probably be ratified with the reservation. Ample discussion, I think, has satisfied the people on that. It would probably go through if called up again.

One reason why we can not build a reservoir is because Texas has no right to build a reservoir in New Mexico; and for the further reason that owing to the peculiarity of our water law, which does not give a vested right against the man upstream. The State of Texas, under the laws of the State of New Mexico, can not file on water in that State. The United States can, as it did at Elephant Butte. In the third place and this is purely an economic reason-experience, I think, shows that private irrigation enterprise or district enterprise have to finance their operations at a heavy discount. For instance, in the State of Texas a perfectly feasible and good district that is highly profitable has to float irrigation bonds at 85 cents on the dollar to market them.

Mr. WHITTINGTON. At what do you quote your bonds that are issued for improvements? I mean for improvements you have already made.

Mr. MILLER. Some at 90 and some at 75.

Mr. ARENTZ. Is that one reason put forth by your officials against the constitutional amendment against tax-exempt securities. If it is, it is a peculiar one.

Mr. BURGES. The rate of interest is 6 per cent.

Mr. ARENTZ. Most of the State officials are against the constitutional amendment doing away with tax-exempt securities, claiming that the interest rate will increase and the discount will be increased also.

Mr. HUDSPETH. I have no information as to how our State officials are on that.

Mr. ARENTZ. I have no communications to that effect, but I know that nearly all States have expressed themselves that way.

Mr. HUDSPETH. The only complaint I hear is against the Government inheritance tax.

Mr. WHITTINGTON. What is the present mortgage indebtedness against the 38,000 acres of land under cultivation and the other lands that may be brought under cultivation by this proposed bill?

Mr. LEATHERWOOD (acting chairman). It is now 12 o'clock and I am not advised as to whether this committee has any authority to sit during sessions of Congress, or, rather, after Congress convenes. I assume it has not yet been granted that permission. Several members of the committee have engagements they must meet at 12 o'clock. May I inquire, Major Burges, whether you and your friends with you are in a position to get in touch with the chairman of the committee, so that you may be advised as to whether there will be a meeting of the committee to-morrow? I assume it will be advisable, having no information from the chairman on the point, to adjourn at this time subject to the call of the chairman.

Mr. HUDSPETH. We should be pleased to continue, but we are glad to meet the convenience of the committee in this respect.

Mr. WINTER. Is it the understanding that immediately after convening to-day the House will take up District of Columbia matters for an hour or two and then proceed to consideration of the Interior Department appropriation bill?

Mr. HUDSPETH. It is my understanding that the House expects to spend an hour or two with District of Columbia matters and then proceed to consideration of the Interior Department appropriation bill.

Mr. LEATHERWOOD. I must leave, but I do not want to delay the hearing to suit my own convenience. I have no objection to continuing the hearing if gentlemen of the committee desire to do so.

Mr. LEAVITT. I am in the same position. I promised to meet some people in my office at 12 o'clock to-day, and therefore must go

now.

Mr. HUDSPETH. If it is agreeable to the committee, we might adjourn over to-morrow, because at 12 o'clock to-morrow the House begins consideration of the debt settlement, and I think everybody will desire to be present when that is done.

Mr. LEAVITT. Unfortunately, I shall not be able to attend hearings here during the next three or four days.

Mr. HUDSPETH. We would not be able to continue after 12 o'clock to-morrow, because the House takes up the question of our debt settlement with Italy at that time.

Mr. LEATHERWOOD. Unless there be objection, it may be well to adjourn at this time subject to the call of the chairman of the committee.

Mr. WHITTINGTON. The acting chairman can later see the chairman and learn whether a meeting can be held to-morrow.

Mr. HUDSPETH. I would suggest that we adjourn until to-morrow at 10.30 o'clock, if it meets the approval of the chairman. Mr. LEATHERWOOD. As acting chairman I will entertain a motion

to adjourn until to-morrow, this to be subject to revocation by the chairman of the committee.

Mr. HUDSPETH. I make that motion.

(The motion was seconded and carried.)

Mr. LEATHERWOOD. The committee will now adjourn until 10.30 o'clock to-morrow morning, subject to revocation of this order by the chairman of the committee if it is not found advisable to continue the hearing to-morrow.

(Thereupon, at 12.05 o'clock p. m., the committee adjourned.)

HOUSE OF REPRESENTATIVES,

COMMITTEE ON IRRIGATION AND RECLAMATION,

Washington, D. C., January 12, 1926.

The committee convened at 10.30 a. m., Hon. Addison T. Smith (chairman) presiding.

The CHAIRMAN. The committee will come to order. We will resume consideration of H. R. 3862, entitled "A bill for the storage of the waters of the Pecos River."

Major Burges was occupying the stand at the time of adjournment and we will hear further from him at this time.

STATEMENT OF RICHARD F. BURGES-Resumed

Mr. BURGES. Mr. Chairman, I was asked yesterday what the districts are paying for water at the present time, and I promised to give that information to-day. The cost varies on our projects that are in different divisions of the districts.

In the Zimmerman district the present cost per year for the delivery of water under the existing conditions is $1.25 per acre. In the Imperial division the cost is $1.50 per acre. At Grand Falls the cost is $1.90 per acre. Perhaps I should explain that this includes the payment of interest and sinking fund.

Mr. WHITTINGTON. Both for operation and construction cost?
Mr. BURGES. Both for operation and construction cost.

The CHAIRMAN. Annually?

Mr. BURGES. Annually.

The CHAIRMAN. What is the average cost?

Mr. BURGES. There are only two divisions where there are any construction costs. I will complete these figures before I come to that.

The cost in the Barstow division is $2 per acre. At Cedar Vale it is $2 per acre. At the Farmers' Independent it is $1.50 per acre. At Porterville, which is purely a pumping proposition from the river, it is $4 per acre.

The CHAIRMAN. That includes operation, maintenance and construction?

Mr. BURGES. Yes, sir. That is the cost for such water as they get.

The CHAIRMAN. How long will it take to pay out on the construction?

Mr. BURGES. The Grand Falls project is paying out at the rate of $5,000 per year on the principal.

What is the total indebtedness now remaining at Grand Falls? Mr. MILLER. The balance at Barstow is $115,000. That has been reduced from $200,000 to $115,000. As I believe I stated yesterday, those costs are being met, and there are no delinquencies. They are up to date in the payment of interest and principal.

Mr. WHITTINGTON. Have you the number of farms?

Mr. BURGES. The number of farms? Yes; I have that. The farming population, strictly rural population, is 1,410 people and 372 farm residences.

Mr. WHITTINGTON. Are those all farm homes? What is the amount of their actual holdings?

Mr. BURGES. I will give you the number of farm homes. Do you want to know the actual holdings?

Mr. WHITTINGTON. I want to know how many land owners there are, the number of settlers that will be affected.

Mr. BURGES. I haven't got that.

Mr. WHITTINGTON. The other question was as to the indebtedness against those lands, mortgage indebtedness against those lands. Mr. BURGES. Do you mean the indebtedness that is held by individuals?

Mr. WHITTINGTON. It does not matter who it is held by. Generally speaking, what is the indebtedness against that land?

Mr. BURGES. That information I haven't at this time. If you had bought your land and had not paid your notes-do you include that?

Mr. WHITTINGTON. Yes.

Mr. BURGES. That information I haven't yet; but we will endeavor to get it.

Mr. WHITTINGTON. You have given the amount of indebtedness for operation and maintenance of these projects. What is the annual tax against that land, in addition to the special assessments, roads, schools, and local assessments?

Mr. MILLER. In Ward County, which comprises three of the districts, they have 86,000 acres. Our annual county and State tax against that particular land is $1.90. That includes schools, roads, etc.

Mr. WHITTINGTON. What is it per acre? Is it not assessed at its full value?

Mr. BURGES. It is less than that. The land in there is assessed as high as $100 per acre. The rate is $1.90. The assessed valuation averages about $60 or $65 per acre. Isn't that right?

Mr. MILLER. On cultivated land that grows crops. But on lands that were in cultivation and have been laid up for want of water, the assessor reduces the valuation when they are not growing crops on the land from $60 to about $12.50. If the owner puts the land in cultivation the next year and raises crops, the assessor increases the valuation again to $60. There ought to be 38,000 acres of land in cultivation in the Pecos Valley to-day. Last season we didn't get more than 26,000 or 27,000 acres, through the lack of water.

Mr. LEATHERWOOD. Under the law is the land assessed at its full valuation?

Mr. BURGES. Theoretically it is, and practically it is not. That is a very bitterly contested question in Texas right now. But the valuation on that land will average from $12.50 for land that is

cultivable but not in cultivation to $60 for land in cultivation, with a rate of $1.90.

Mr. WHITTINGTON. What does that include?

Mr. BURGES. It includes school and road tax.

Mr. WHITTINGTON. All taxes in addition to the assessments?
Mr. BURGES. Yes, sir.

The CHAIRMAN. Assuming that you can get this legislation through, how long do you think it will take for the farmers to repay the advance to be made by the Federal Government of $3,000,000?

Mr. BURGES. I have no doubt that they will meet their payments on the basis of 20 payments, as the law now authorizes.

The CHAIRMAN. The amended act of December 5, 1924, bases the return on the productive power of the land?

Mr. BURGES. Yes, sir..

The CHAIRMAN. And in some instances that would extend the payments far beyond 20 years?

Mr. BURGES. I may be wrong about that.

The CHAIRMAN. The law provides that the settlers shall take these projects over under certain conditions and, under those conditions, no doubt, the payments or the period of repayment would be limited. Much of this land is under cultivation, and is not raw land. Congress does not look with favor upon extending the payments for an indefinite time on land that is producing.

Mr. BURGESS. My opinion is that there will be no difficulty on their part in repaying within the 20-year period. We have always thought in terms of that period, because that is what we are doing under the Elephant Butte project, and that is a good example of Federal reclamation. And that is true of Carlsbad. Those people are accustomed to that thought. Whether it would be possible to meet even more strict terms than that, I don't know. I am quite confident that they will meet it within the 20-year period.

Mr. LEATHERWOOD. Would not that practically amount to the sale of water? That land, as I understand it, is in private ownership. Mr. BURGES. It is in private ownership. That is true. Mr. WINTER. And under an irrigation system now?

Mr. BURGES. The farmers cooperative's own the present canals. Mr. LEATHERWOOD. What those farmers want is more water?

Mr. BURGES. What they want is more water.

Mr. LEATHERWOOD. Why not furnish them the water?

Mr. BURGES. That might be entirely satisfactory.

Mr. LEATHERWOOD. Let the Government provide storage reservoirs and sell them the water.

Mr. BURGES. I presume that would be entirely satisfactory. Of course, the one need that they have is for stored water.

If I may, I would like to call attention to the conclusions of the geological report to which I alluded yesterday. Referring to the report on the preliminary investigation for the Pecos River storage on the Red Bluff Reservoir site, made in 1924, by Mr. E. E. Teter and Dr. Willis T. Lee, I went to call attention to the conclusions which I referred to yesterday.

They state that the mean annual run-off on the State line is ap proximately 395,000 acre-feet. They state that the annual flow of the Pecos is of such an erratic and flashy nature that storage should