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standing this correspondence the report finally submitted August 17, 1943, by the Bureau to the House committee was identical in every particular with the preliminary draft. If the proper principles of calculation proposed in their letters had been used the flood benefit would have been so materially increased that it would have assumed definite dominance.
In that particular, Mr. Chairman, we filed with the Flood Control Committee of the House a memorandum of which I would like to leave a copy with you. It is in the record and outlines the methods of analysis and our many differences in that respect. Failure to use these methods in the first place tended to reduce the flood benefit from $732,700, as shown in the Army report, to $262,000.
In the case of irrigation benefit in calculating the value of an increase in useful water brought about by regulation, the only method of any merit, which is the one used by ourselves and the Army, multiplies the increase of useful water by certain dollar values per acrefoot, which are predicated upon reasonably established practices. This was not done by the Bureau, who, on the other hand, used methods based upon radically unsound assumptions.
In addition, the Bureau credited $209,000 as an irrigation benefit for the prevention of further flooding in the Buena Vista Lake area instead of crediting this to flood prevention. It can be said that this area is used in times of high floods as a reservoir to absorb excess flows which would otherwise cause great damage to farming lands lying to the north and ultimately also in Tulare Lake. Two small portions are also used at other times for regulation of normal flow. But except for flood years, this area of 25,000 acres produces crops of great value which are destroyed or prevented in order that floods do not damage other lands and their crops.
This Buena Vista Lake area has no water right, yet the Bureau calls the protection from floods an irrigation benefit, but finally in the allocation of the costs to the various irrigation interests, makes no charge to Buena Vista Lake lands for its protection.
The result of all this was to raise the irrigation benefit to $410,500, as compared to $153,000 which was estimated by the district and division engineers of the Army, and which closely approaches our own calculations.
Senator Burton. You have got that really as flood benefit and not as irrigation ?
Mr. HENDERSON. Yes.
Senator BURTON. And not charged in, to recompense the Government?
Mr. HENDERSON. It is irrigated land that is flooded, in order that other land may be protected from floodings.
The findings of both of these Federal agencies are presumed to be based upon studies made up of the same data, virtually all of which was furnished by us. These widely differing results are quite incomprehensible and are the reason for our own independent studies, which have verified the Army's conclusions.
After the Chief Engineer of the Bureau of Reclamation had written, as he did, finally agreeing to the following of sound principles of analysis of the flood damages, we were astounded to find that the
report they filed with the House committee was identical with the report they had agreed in writing would be revised.
The 1937–38 damages from Kern River were in excess of $3,000,000.
Historically, these as well as earlier floods are well established in the report of the Army. Since the completion of this report, however, there have been two additional heavy flood years, 1941 and 1943. In the Tulare Lake Basin, into which flow the floodwaters of the Kern, Tule, Kaweah, and Kings Rivers, it is estimated that an additional loss of $19,000,000 has been experienced. In 1943 $10,000,000 of this loss occurred, for which the Kern River furnished 40 percent of the floodwater. Our city of Bakersfield has been endangered several times in the past 3 years, and our farming lands, oil fields, railroads, highways, and public utilities have been damaged or threatened. A great deal of this loss could have been prevented if the proposed program could have been carried out when first presented.
We have several oil fields which are exposed to danger of flooding. These fields are highly productive and have been referred to in some detail in the House hearings.
In one field alone the operators and owners have spent $500,000 for a protective system. This is the Coles Levee Field. In the Paloma Field, oil of a gravity of 50 to 55 degrees is found. A reserve of 85,400,000 barrels of oil has been estimated and a reserve of 581,000,000,000 cubic feet of wet gas. It is possible, when properly handled, to recover 75 percent of the oil and 95 percent of the gas for the war program. These fields must be protected.
Mr. ELLIOTT. I was wondering if Mr. Harris could be permitted to make his statement now as he has to get away.
Mr. HENDERSON. That will be satisfactory to me. I can finish this up, I will go over it and submit it to the committee.
Senator OVERTON. All right. Thank you very much. .
STATEMENT OF RONALD B. HARRIS, REPRESENTING IRRIGATION
DISTRICT ASSOCIATION OF CALIFORNIA, FRESNO, CALIF. Mr. HARRIS. My name is Ronald B. Harris. I am here representing the Irrigation District Association of California. This Irrigation District Association has been in existence for more than 25 years and represents irrigation districts from the Mexican border to the northern limits of California. It is not a paper organization. It is one of the functions of this association to follow legislation and we are here now for the first time for our first appearance at any time here in Washington except for Mr. Althouse's appearance before this committee on the rivers and harbors bill.
Senator OVERTON. What is the membership composed of, local districts?
Mr. HARRIS. I have a statement here, it does not quite contain all the irrigation districts. It includes reclamation districts and water storage districts.
Senator OVERTON. How many districts are there that are members?
Mr. Harris. About ninety-odd. Here is a statement of what it consists of.
Senator OVERTON. How many irrigation districts are there in Central Valley?
Mr. HARRIS. I don't know exactly.
Senator OVERTON. Does anybody know how many irrigation districts there are?
Mr. HARRIS. Here is a map showing in detail the irrigation districts, reclamation districts, public utility districts, water districts, and so forth. We do not represent the public utility district.
Senator OVERTON. Are there 50 districts in that?
Senator OVERTON. I want to know approximately how many there are in the Central Valley.
Mr. HARRIS. I cannot give you that exactly. Senator OVERTON. No; not exactly, but approximately? Mr. HARRIS. Well, I would say 50 or more. What I am speaking for is this flood-control program of the Army which takes in the whole State. I am speaking for San Diego and Los Angeles, and all the other projects, and this association in support of the Army program for flood control in the State of California. The irrigation districts in the State of California in the Ceneral Valley are opposed to any further encroachment into the State of California by the Reclamation Bureau. The Bureau came in with the original authorization which was presented to the President by the Secretary which was mentioned here this morning, in connection with this project of $170,000,000 for the Shasta project, the Contra Costa canal and the other units pertaining to that in the State. Since then they have expanded their dream and their program to take in all the streams of the State, take all the water of the State, take all the power of the State. One man responsible to the President of the United States will then own all the power and water of the State of California and will be dominated and controlled by that one man.
Senator OVERTON. Are there any districts in the State that are in favor of that?
Mr. HARRIS. No. We are starting now initiating a program for the purpose of recapturing for the State of California those properties that the Bureau has seen fit to take away from us. It was in 1937 or 1938 that Congress turned the revenues from power development over to the Treasury of the United States forever. When we asked the Reclamation Bureau to come in on that construction that law didn't exist. So what we want to do is this, what our aim will be through our legislature, through our water authority of the State is to properly negotiate a contract between the Bureau and the water authority of the State of California wherein we will repay the loan of the money that has been advanced for the construction of the Central Valley project and as we pay the loan we will own it ourselves. The credit of the State will be behind it. We did not intend ever to sell our properties for a loan, but that is what it amounts to. Now then, the heart of this great dream of theirs of socialization and communism is what they call the Great Central Valley project. We want to have something to say about that. Therefore our only idea is to get it back within the control of our State, water authority, so that we may say what is to be done with the water and the power and with the high civilization which they describe as existing there.
Senator ÖVERTON. The Association of Irrigation Districts of California which you represent is bitterly opposed to the Bureau of Reclamation being placed in charge?
Mr. HARRIS. To any further extension of the Bureau. There was one question raised about that section 6. The State engineer of California was somewhat concerned about that—we were in conference and we were discussing that very provision. We would want to let that stay in as it is now, so that this bill may pass as it is written. We are a little fearful that there might be an interpretation placed on that which would be an opening wedge for the Secretary of the Interior to try to come in to control those projects built by the Army, and we are fearful of that, but at this stage we are not objecting to the language as it is contained in the original bill, because we want this flood control bill as it is to pass Congress and the Senate.
Senator OVERTON. Thank you, very much. We will recess now until Monday morning at ten o'clock. The following letter was received today from the Secretary of the Interior and will be placed in the record at this point.
DEPTARTMENT OF THE INTERIOR,
Washington, D. C., June 2, 1944. Hon. Josiah W. BAILEY,
Committee on Commerce, United States Senate. MY DEAR SENATOR BAILEY: In accordance with the invitation contained in your letter of May 19 addressed to Under Secretary Fortas, I am submitting in this letter my comments and suggestions with respect to H. R. 4485, a bill “Authorizing the construction of certain public works on rivers and harbors for flood control, and for other purposes." In addition, at the convenience of the subcommittee of which Senator Overton is chairman, I shall be glad to appear with other officials of the department of the Interior for the purpose of making available to the subcommittee full information with respect to a number of the projects listed in H. R. 4485.
I recommend that H. R. 4485 be enacted, provided it is amended substantially along the lines hereinafter suggested.
First. Section 3 of the bill should, in my judgment, be recast so as to read substantially as follows:
"SEC. 3. The Chief of Engineers, under the supervision of the Secretary of War, is authorized to construct, maintain, and operate public park and recreational facilities in reservoir areas under the control of the War Department, or to permit the construction, maintenance, and operation of park and recreational facilities in said areas by any public or private agency or person, and the Secretary of War is authorized to lease for park or recreational purposes lands, structures, or facilities in said areas for such periods, not exceeding 20 years, and upon such terms as he may deem reasonable: Provided, That permits or leases to Federal, State, or local governmental agencies for the use of areas suitable for public park or recreational purposes may be granted without monetary consideration when the Secretary of War determines such action to be in the public interest. The utilization for park or recreational purposes of any such reservoir area shall conform to plans prepared by the National Park Service, under the direction of the Secretary of the Interior, in accordance with the act of June 23, 1936 (49 Stat. 1894). Funds appropriated for the design, construction, or operation of any reservoir project under the control of the War Department shall be available for transfer to the Department of the Interior for the performance of park and recreational services under this section, and for the making of investigations, studies, and designs relating to the utilization of such reservoir project for fish and wildlife conservation, in accordance with the Act of March 10, 1934 (48 Stat. 401). All moneys received for leases or privileges granted under this section shall be deposited in the Treasury of the United States as miscellaneous receipt."
The primary purpose of the foregoing amendment is to provide for the administration of the recreational features of War Department reservoir projects by the Corps of Engineers in accordance with plans prepared by the National Park Service in this Department. This arrangement would give proper recog. nition to the technical expertness of the National Park Service in recreational matters, and would make the experienced services of that organization available to the War Department. At the same time it would not disturb the authority of the War Department to determine whether recreational developments should be permitted in any particular area. Its adoption would promote not only good management of the recreational features of the projects involved, but also over-all coordination of Federal activities generally in connection with recreation. In addition, this amendment provides for appropriate implementation of the somewhat similar arrangement in the field of fish and wildlife conservation authorized by the Coordinating Act of March 10, 1934 (48 Stat. 401).
Second. After section 3, or at such other place in the bill as may be deemed appropriate, I suggest the insertion of a new section along the following lines :
"SEC. 4. Electric power and energy generated at reservoir projects under the control of the War Department and in the opinion of the Secretary of War not required in the operation of such projects shall be delivered to the Secretary of the Interior who shall transmit and dispose of such power and energy in such manner as to encourage the most widespread use thereof at the lowest possible rates to consumers consistent with sound business principles, the rate schedules to become effective upon confirmation and approval by the Federal Power Commission. Preference in the sale of such power and energy shall be given to public bodies and cooperatives.
"At reservoir projects under the control of the War Department which, in the opinion of the Secretary of War, upon the recommendation of the Chief of Engineers and the Federal Power Commission, are suitable for the production of electric power and energy, the Secretary of War is authorized, with funds specifically appropriated therefor, to provide, construct, operate, maintain, and improve such structures, machinery, equipment, facilities, and supplies as the Secretary of the Interior may deem necessary to develop power and energy for existing and potential markets and for the proper reception, handling, and dispatch of electric power and energy; and operations of all such machinery and facilities shall be scheduled in accordance with the requirements of the Secretary of the Interior so far as consistent with requirements for the use or control of water for the other purposes of said projects as may be determined by the Secretary of War. The Secretary of the Interior is authorized to construct and acquire such transmission lines and facilities and to enter into such contracts, agreements, and arrangements as he deems necessary to carry out the duties and responsibilities herein conferred upon him.”
The first paragraph of this proposed amendment provides that hydroelectric power developed at any War Department reservoir project in excess of that needed for the operation of the project shall be delivered to the Secretary of the Interior who is directed to transmit and dispose of the power in such manner as to encourage the most widespread use thereof at rates confirmed and approved by the Federal Power Commission. Preference in the sale of the power is accorded to public bodies and cooperatives. The second paragraph of this proposed amendment provides that when a project is found by the Secretary of War, after consultation with the Federal Power Commission, to be suitable for the production of hydroelectric power, the War Department shall have authority to construct and maintain the necessary generating facilities, but only if founds are specifically appropriated by the Congress for that purpose. This paragraph also implements the power distribution arrangements contemplated by the first paragraph in other necessary particulars. The purpose of the foregoing amendment is the same as that of the power amendment which I suggested in my report of April 17 on the rivers and harbors bill, H, R. 3961. The language, however, has been rephrased so as to make clear the circumstances in which a project may be deemed suitable for power development, and so as to make the scope of the amendment consistent with the scope of the other introductory sections of H. R. 4485, which lay down general principles to govern the administration of all War Department reservoir projects.
In the April 17 report above mentioned I discussed the need for the establishment by the Congress of policies to govern the disposal of power from these projects that are financed with public funds and make use of public resources. The need is given more emphasis by H. R. 4485, if only for the reason that a larger number of projects, having power possibilities of greater magnitude, are authorized by the bill.
The policy contained in this proposed amendment is for disposal of the power created at these projects in such manner as to earn a revenue, to avoid the monopolistic position of utilities buying at the switchboard and to diffuse the benefits of the power to numerous small purchasers. This power is the property of