the Secretary. In sales or leases, for purposes other than irrigation farming, of land owned by the United States, the Secretary may provide by regulation for preference of the owner from which the United States acquired the land, or the lessee of such land at the time of such acquisition, whether acquired for construction purposes or pursuant to this Act, it being the policy of the Congress to provide that such former owners, and such lessees thereof may, upon terms and conditions satisfactory to the Secretary, remain on the land acquired by the United States until such time as in the judgment of the Secretary the land is needed for construction or development of the project.

"(d) Any lands or interests in lands acquired by the United States under the provisions of this Act shall be subject to all provisions of the laws of the State of Washington relating to the organization, government, and regulation of irrigation and reclamation districts and shall be subject to liens for charges legally assessed by any such district, to the same extent and in the same manner as public lands subject to entry are or may be subject to said laws and charges by the provisions of sections 1, 2, 3, 5, and 7 of the Act of August 11, 1916 (39 Stat. 506), as amended by the Act of May 15, 1922 (42 Stat. 541). Upon the execution by the United States of a contract of sale of any lands within the Columbia Basin project, the lands to which such contract relates may be taxed by the State or political subdivision thereof in which such lands are located, in the same manner and to the same extent as lands of a like character held under private ownership may be taxed. All taxes legally assessed upon said lands contracted for sale shall be a lien upon the lands and may be enforced upon said lands by the sale thereof in the same manner and under the same proceeding whereby said taxes are enforced against lands held under private ownership: Provided, That the title or interest which the State or political subdivision thereof may convey by tax sale, tax deed, or as a result of any tax proceeding shall be subject to a prior lien reserved to the United States for all unpaid installments upon the contract of sale, whether accrued or otherwise and any other charges upon said land which have accrued or may accrue under and by virtue of said contract of sale or the contract between the United States and the irrigation district in which the land is located.

"(e) The Secretary shall prepare, in collaboration with the Secretary of Agriculture, the heads of such other Federal departments and agencies as would be concerned therewith, and such representatives as may be designated for the purpose by the irrigation districts under contract with the United States pursuant to section 2 (b) of this Act, a program of project land acquisition, development, and settlement. This program shall provide for the participation therein of the Department of Agriculture and of other Federal departments and agencies to the extent that they are qualified, in view of their functions and facilities, to perform to the best advantage the units of work to be prosecuted thereunder, and the program shall be set forth the parts of the work to be performed by the Secretary and the parts to be performed by the other departments and agencies. This program, and modifications thereof, shall be presented, together with the recommendations thereon of the collaborating departments and agencies, to the President, and shall become effective upon his approval thereof. To enable any department or agency to carry on work that it is authorized to perform under this approved program, and for which it has not received a direct appropriation, the Secretary may transfer to such department or agency, from funds appropriated to the Department of the Interior under the authority of this Act, such amounts as may be required for the accomplishment of such work.

"SEC. 5. The Secretary may enter into agreements to pay, out of funds derived from the leasing of lands acquired pursuant to, or funds appropriated under, the authority of this Act, annual sums in lieu of taxes to any State or political subdivision thereof with respect to any real property situated therein acquired pursuant to the authority of this Act. The amount so paid for any year upon any such property shall not exceed the taxes that would be paid to the State or subdivision as the case may be upon such property if it were not exempt from taxation thereby.

"SEO. 6. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums of money as may be necessary to carry out the provisions of this Act, to be reimbursable to the extent required by this Act. All revenues received in carrying out the provisions of section 4 of this Act shall be covered into the General Treasury as 'Miscellaneous

Receipts.' Amounts equal to appropriated funds requisitioned by the Secretary and made available for disbursement on the books of the Treasurer of the United States shall be debited in a special account in the Treasury, to be known as the 'Columbia Basin and Development Account.' Amounts equal to revenues covered into the General Treasury as 'Miscellaneous Receipts,' shall be credited in said special account. After such credits equal the amount of the debits with interest thereon at the rate of 3 per centum per annum from the respective dates of the debits, additional credits in said special account shall be made by the Secretary, in the manner determined by him, the basis of corresponding credits to the construction cost obligations of the irrigation district or districts entering into contracts under section 2 of this Act.

"SEC. 7. No water shall be delivered for irrigation purposes within the project, until the State of Washington, by appropriate legislation, shall have adopted, authorized, ratified, and consented to all the provisions of this Act insofar as such provisions or any of them, in whole or in part, may come within the scope of State jurisdiction or authority or be applicable to State lands.

"SEC. 8. The Secretary is authorized to perform any and all acts, to make such rules and regulations, and to include in the contracts hereinbefore provided for such provisions as he may deem necessary and proper for the purpose of carrying the provisions of this Act into full force and effect. Wherever in this Act functions, powers, or duties are conferred upon the Secretary, said functions, powers, or duties may be performed, exercised, or discharged by his duly authorized representative or representatives. Authority like that granted to the Secretary by this section is hereby granted to the head of any department or agency which is to perform any part of the project land acquisition, development, and settlement pursuant to section 4 (e) to the extent required fully to perform the work assigned to him under that section.

"SEC. 9. The consent of the United States is hereby given to the sale of school lands and any other public lands of the State of Washington which may be included in any irrigation or reclamation project to which this Act is or may be applicable at prices not to exceed the appraised valuation thereof, determined as herein provided.

"SEC. 10. If any provision of this Act or the application of such provision to any person or circumstances shall be held invalid, the remainder of the Act and the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby.

"SEC. 11. This Act may be cited as 'The Columbia Basin Project Act.'" The CHAIRMAN. The committee will please come to order. We have met this morning to begin consideration of H. R. 6522, a bill to amend an act entitled "An act to prevent speculation in lands in the Columbia Basin prospectively irrigable by reason of the construction of the Grand Coulee Dam project and to aid actual settlers in securing such lands at the fair appraised value thereof as arid land, and for other purposes". That is the act of May 27, 1937. As I understand, this bill would practically supersede all the provisions of the act mentioned, which is Public, 117, 75th Congress, which had for its purpose the prevention of speculation in lands in the Columbia Basin prospectively irrigable by reason of the construction of the Grand Coulee Dam project and to aid actual settlers in securing such lands at the fair appraised value thereof as arid land.

This matter is a proposed change in the law supplementing the law, as outlined in the report of the Secretary of the Interior on H. R. 6522.

For convenience of members of the committee a copy of the report of the Secretary of the Interior on the pending bill is before each member of the committee. It is of considerable length and goes into the subject at great detail.

I am wondering whether it is the pleasure of members of the committee that the report be read in full or that we proceed to hear representatives of the Department. What is your pleasure?

Mr. ANDERSON. Let us hear the explanation of representatives of the Department. We can read the report of the Secretary of the Interior.

The CHAIRMAN. Then I will insert the letter of the Secretary of the Interior after reading only a little of it. (The matter referred to is as follows:)

THE SECRETARY OF THE INTERIOR,
WASHINGTON, January 30, 1942.

The SPEAKER OF THE HOUSE OF REPRESENTATIVES.

MY DEAR SPEAKER: I submit herewith for the consideration of the Congress a draft of a bill to amend an act entitled "An act to prevent speculation in lands in the Columbia Basin prospectively irrigable by reason of the construction of the Grand Coulee Dam project and to aid actual settlers in securing such lands at the fair appraised value thereof as arid land, and for other purposes" (act of May 27, 1937, 50 Stat. 208).

I recommend that the proposed legislation be enacted.

The inauguration of a sound land-settlement policy covering the lands in the Columbia River Basin prospectively irrigable by reason of the construction of the Grand Coulee Dam, is of foremost importance to the economy of the Nation, the Pacific Northwest, and the Columbia Basin. The area affected is about the size of the State of Delaware.

The proposed bill is a product of careful studies conducted over a considerable period with a view of recommending policies and plans for a speedy and stable development of this area. The bill may be said, generally speaking, to emanate from two prime considerations. First, there are the studies conducted under the sponsorship of the Bureau of Reclamation, known as the Joint Investigations, Columbia Basin Project. In these studies the views of many qualified and disinterested experts and also of diverse affected Federal, State, and local agencies and private interests were obtained and considered. The leadership of these studies state the adoption of guiding principles as follows:

"First, that the planning should be aimed at making the project a successful project, which will necessitate returning to the Government such funds as the law contemplates shall be returned, and taking such steps as will insure, insofar as possible, that the settlers themselves will have a chance to be successful in their efforts to establish decent American homes; second, that the project should be developed in such a manner that numbers of indigent farm families forced from homes elsewhere through no fault of their own will be given an opportunity to rehabilitate themselves and to reestablish ties with wholesome community life; and, third, that since the future will not bring, so far as we now can see, another opportunity to develop so large and fine a block of land, all the experience gained and the knowledge acquired in past efforts to settle and develop land should be used to make this project, not Utopian, but as near the ideal American farming community as can be.

"The planning of the Joint Investigations was started with the assumption that settlement should be by families, and with the conviction that we should not have to reap two or three crops of settlers to obtain one which takes root and remains. The studies are not all completed. Sufficient progress has been made, however, to warrant recommending now the adoption of the elements of a program. Certain decisions should be made at this time."

The basic policy recommendations referred to have been incorporated in this bill.

In the second place, the existing law, act of May 27, 1937 (50 Stat. 208), known as the Antispeculation Act, is unworkable and confusing in a number of major aspects. In particular, it is inadequate to prevent speculation in the lands in question, thus to insure a fair cost to the ultimate settler.

Hence this bill supersedes the existing law to eliminate its present faulty provisions as well as to add new matter pursuant to the recommendations of the Joint Investigations.

The major characteristics of the attached bill may be summarized as follows: (1) The bill reauthorizes the Grand Coulee Dam project, to be known as the Columbia Basin project, as a project subject to the Reclamation Project Act of 1939 (53 Stat. 1187).

(2) The bill requires that, before commencement of the construction of the irrigation features, exclusive of Grand Coulee Dam and appurtenant works

now under construction and of the pumping plant and equalizing reservoir and dams, the irrigation districts concerned must enter into repayment contracts with the United States, and that such contracts must provide, among other things, for the establishment of farm-unit plats, each farm unit to contain not more than 160 nor less than 10 acres of irrigable lands, dependent, taking into account all appropriate factors, on the respective areas sufficient in size for the support of an average-sized family. No one person or family could receive water for more than one farm unit, except that those who were owners of lands within the project area as of the date of the enactment of the so-called AntiSpeculation Act, or their heirs or devisees as to such lands, may select and receive water for one or more farm units, provided that the total irrigable acreage of the units so selected does not exceed 160 acres, or the total irrigable acreage of their holdings as of such date, whichever is less.

(3) In addition to the foregoing provisions, there are certain provisions in the bill which, I believe, will accomplish much toward the prevention of unduly These provilarge holdings and the prevention of speculation in these lands. sions, which are largely penal in nature and which will remain in effect for 10 years from the time water becomes available, consist of:

(a) Provision whereby each owner of land within the project must, as a condition precedent to receiving water, execute a recordable contract agreeing to sell his excess lands at the appraised value thereof and of the improvements thereon, as determined by the Secretary of the Interior. If a landowner, having land covered by such a contract, thereafter sells any of the lands involved at a price in excess of this appraised value, the Secretary may, within a given period of time, cancel the right of such land to receive water. Furthermore, the bill provides that one who has been sold lands covered by a recordable contract for a consideration in excess of the appraised value may, in certain instances, rescind the contract and recover payments theretofore made, or proceed to take or hold title with remedies such that the total consideration will be only 75 percent of the appraised value.

(b) Provision whereby fraudulent misrepresentation as to the true consideration involved in the transfer of land covered by a recordable contract constitutes a misdemeanor punishable by fine not exceeding $500 or imprisonment not exceeding 6 months, or both such fine and imprisonment.

(c) Provision whereby fraudulent misrepresentation or withholding of any material fact with respect to lands in the Columbia Basin project for the purpose of inducing the purchase of any such lands will constitute a misdemeanor punishable by fine not exceeding $500 or by imprisonment not exceeding 6 months. or by both such fine and imprisonment.

(4) The bill authorizes the acquisition in the name of the United States of lands within or without the project area, by purchase or condemnation, and the acceptance of donations of land or money for the purposes of the project, and the administration of such lands. If lands are sold for irrigation farming, the terms of sale must be such, in any event, as to return within 40 years the appraised value thereof and of improvements thereon with interest at 3 percent per annum. Lands leased for such purpose must provide comparable returns. The bill further authorizes the construction of improvements on lands so acquired and the dedication of lands for appropriate public purposes.

(5) The bill also contains comprehensive provisions for the clearing, leveling and preparation of irrigable lands for the distribution and utilization of water from the project; and it makes provision, on an experimental basis in connection with the first three irrigation blocks, for construction of certain other improvements on the land and for certain loans to settlers for operations during the development period.

(6) The bill provides that a program of the land acquisition, development and settlement authorized thereunder shall be prepared by this Department in collaboration with the interested irrigation districts and other interested Federal departments and agencies. This program is to become effective on approval by the President. Provision is also made, through this program approving procedure, for participation of the Department of Agriculture and other Federal agencies as well as this Department in the work covered by the program. Through this provision, it is believed that the fullest use can be made of various agencies of the Federal Government that are qualified by their functions and facilities to make valuable contributions to the development of these phases of the project. (7) The bill anticipates local taxing problems arising out of the acquisition of lands by the United States under the authority of the bill, and permits

the making of agreements for the payment, out of funds derived from the leasing of these lands, of sums in lieu of taxes to the State of Washington or its political subdivisions.

(8) The bill makes provision for reducing the repayment obligations of districts, contracting to repay construction charges under the provisions of section 2 (b), by the amount by which the revenues realized in carrying out the land acquisition, development, and settlement program under section 4 of the bill exceed the cost of that program with interest at 3 percent per annum.

(9) The bill provides that water for irrigation purposes will not be delivered until its provisions have also been adopted, ratified, and consented to by the State of Washington, through appropriate legislation.

Preliminary drafts of this proposed legislation have been made available to representatives of the irrigation districts concerned and to others who are interested in one way or another in the Columbia Basin project. Many useful suggestions were made and many have been incorporated in the proposed legislation. It is my view that the bill is a decided improvement over the existing law, and, on the basis of comments received from those interested in it locally, I feel that it is so regarded by the people of the Northwest. I believe the people in the area of the project and in the Northwest will embrace and approve it. I am advised by the Director of the Bureau of the Budget that the proposed legislation is not in conflict with the program of the President.

Sincerely yours,

HAROLD L. ICKES, Secretary of the Interior.

STATEMENT OF HON. KNUTE HILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

The CHAIRMAN. The Department of the Interior and the Bureau of Reclamation are represented here this morning by Mr. John C. Page, Commissioner of the Bureau of Reclamation. If it is agreeable

Mr. HILL of Washington. I do not want to break in unnecessarily, but I should like to have about 3 minutes at this time to make a short statement. I am a member of the Committee on Ways and Means, as you know, and it is holding an important meeting this morning. Therefore I should like to go back to that committee as soon as practicable.

The CHAIRMAN. Mr. Hill represents the area in Washington_in which much of the land affected by this bill is located. Is that right? Mr. HILL of Washington. Yes.

The CHAIRMAN. As Mr. Hill has said, he is a member of the Committee on Ways and Means, which has before it an important tax bill; and if there is no objection, Mr. Hill will be allowed to make his statement at this time.

Mr. WINTER. I suggest that we keep him here with us.

The CHAIRMAN. We all agree that he was a very useful and good member of this committee.

Mr. HILL of Washington. I spent 8 very fine and pleasurable years as a member of this committee. I do not say that I do not like it better on the Committee on Ways and Means, but it is really a harder job there, because we are going to tax you fellows good and plenty before we get through with this pending tax bill for the next year, or, rather, for this year.

I should very much appreciate your giving me 2 or 3 minutes at this time.

The CHAIRMAN. We shall be glad to hear you.