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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.

Hon. JOSIAH W. BAILEY,

DEPTARTMENT OF THE INTERIOR,
Washington, D. C., June 2, 1944.

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 recognition 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

the United States. It is held in trust for the people and should be disposed of in a manner consonant with the public interest.

The policy I am now urging is not new. It stems from the long established principle of assuring widespread distribution of the benefits of Government-owned property, a principle which has governed the disposal of public lands from the beginning of our Government. Application of this principle to power disposition had its beginnings 38 years ago in an amendment to the Federal reclamation law. The policy so initiated has been extended and implemented by the Congress in such enactments as the Boulder Canyon, the Bonneville, the Fort Peck, and the Tennessee Valley Authority Acts. It has been tested in actual operation and administration and the proof of its worth has been found by millions of our citizens in the form of real benefits, both direct and indirect, flowing from low cost electricity. All I ask is that such a policy be given uniform application no matter by whom administered. Unless this is done there will result unfair discrimination against the residents of the areas in which are located the power projects included in H. R. 4485.

The amendment here suggested would provide the necessary legislative blueprint for the sale and distribution of power from the projects covered by its terms. In addition, the amendment would provide this blueprint now, when it is most needed, so that the policy will be known and reliance can be placed on the program to be followed. In some cases the Army reports upon the projects included in the bill contain statements or recommendations which would tend to nullify the historic policy of protecting the public interest which I have mentioned. Without the proposed amendment the bill might be construed as permitting these statements or recommendations to control the disposition of power until such time as legislation dealing with the power aspects of the projects. involved is enacted. For example, if the reports were to be followed, it is apparent that the power produced at the Narrows Reservoir in Arkansas, the Whitney Reservoir in Texas, and the Allatoona Reservoir in Alabama would be sold only at the switchboard under contracts approved by the Federal Power Commission. This method of disposition would imperil the financial prospects of these projects and would make probable and easy the absorption of the power and the benefits by a single person or entity. It would prevent effective integration of the projects with others, public or private, and would preclude operation in such a way as to obtain the maximum efficient utilization of machinery, water, and investment. Approval of the contracts by the Federal Power Commission could not prevent this result, because the narrowly restricted market resulting from the absence of transmission lines would necessarily be reflected in the terms of the contracts. In addition, such a procedure would appear to inject the Federal Power Commission, a regulatory agency, into the operating and marketing field, a development of questionable governmental soundness. As to the projects for which no power marketing policy is, or may be construed to be, applied under the bill as it now stands, my belief is that the absence of any policy is almost as dangerous, and may be more wasteful, than a bad policy. The application of the power-marketing policy outlined above needs no urging or explanation where streams having major possibilities such as the Missouri are involved, or where the contemplated power developments are capable of integration with existing Federal power operations in the same area. Thus, the projects on the Willamette, all of which are within the area served by the Bonneville Power Administration, should be governed by the same policies as, and integrated with, the operations now under the control of that agency, if the power is to be disposed of with maximum efficiency and economy.

Third. A proviso should, in my opinion, be added to section 4 of the bill in order to assure that the disposition of water for domestic and industrial purposes, from reservoirs serving irrigation purposes as well, shall, consistently with the irrigation provisions of section 6 of the bill, he handled pursuant to the Federal reclamation laws. While it is true that section 4 does not involve reclamation but covers merely the sale of water for domestic and industrial uses, it is true also that, in those situations where the disposition of water for irrigation purposes will be accomplished under the Federal reclamation laws, the disposition of water for domestic and industrial purposes should be accomplished under the same statutes in order to achieve efficient and economical administration. The Federal reclamation laws contain provisions specifically designated to meet this situation. I suggest therefore, that the following proviso be added at the end of line 18 on page 3 of the bill: "Provided, That the Federal

reclamation laws shall govern the disposition for domestic or industrial uses of surplus water from any reservoir utilized for irrigation purposes pursuant to section 6 of this Act."

Fourth. I regard section 6 of the bill as intended to provide for the application of the Federal reclamation laws to projects having irrigation possibilities. The desirability of such application is discussed in the portion of my report of April 17 which deals with the irrigation aspects of the river and harbor bill. However, the provisions of this section are not entirely apt in their relation to the various technical features of the Federal reclamation laws. For this reason,

I would much prefer to have the section read substantially in accord with the. following proposed amendment:

"SEC. 6. Hereafter, whenever the Secretary of War determines, upon recommenation by the Secretary of the Interior, that any dam and reservoir project operated under the direction of the Secretary of War can be consistently utilized for irrigation purposes, the Secretary of the Interior is authorized to construct, operate, and maintain, under the provisions of the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and acts amendatory thereof or supplementary thereto), or under the provisions of other applicable laws, such additional works in connection therewith as he may deem necessary for irrigation purposes. Such irrigation works may be undertaken only after a report and findings thereon have been made by the Secretary of the Interior as provided in said Federal reclamation laws or other applicable laws; and, within the limits of the water users' repayment ability, such report may be predicated on the allocation to irrigation of an appropriate portion of the cost of structures and facilities used for irrigation and other purposes. Dams and reservoirs operated under the diection of the Secretary of War may be utilized hereafter for irrigation purposes only in conformity with the provisions of this section, but the foregoing requirement shall not prejudice lawful uses now existing."

Fifth. The Missouri River Basin project proposed to be authorized by the paragraph beginning at line 13 on page 12, and ending at line 10 on page 13 of this bill is not, in my opinion, truly comprehensive in character. The reasons for this conclusion were indicated in he course of the hearings had before Senator Overton's subcommittee in connection with the river and harbor bill. Accordingly, I do not recommend the adoption of this project. Should your committee determine upon retaining it in the bill, then I urge your committee to insert the following proviso in lieu of the less comprehensive proviso now appearing at lines 24 and 25 on page 12 and at lines 1 to 3 on page 13 of the bill: "Provided, That nothing in this Act shall be construed as authorizing any demand upon the water resources of the Missouri River Basin that will adversely affect the beneficial consumptive use of such water resources for municipal, domestic, and livestock water supply, for irrigation of arid and semiarid lands and for mining and industrial purposes.”

In the absence of any general statute affording adequate protection for the beneficial consumptive use of water in the West, a proviso such as the foregoing constitutes, in my judgment, the very minimum of protection required for the States of the upper Missouri River Basin. What is possibly the largest remaining area of undeveloped irrigable land anywhere in the United States lies in the upper drainage of the Missouri River and its tributaries within the States of Montana, North Dakota, South Dakota, and Wyoming. The present irrigated acreage of about 4,400,000 acres could be more than doubled by the construction of reservoirs and canals utilizing more fully the waters of the streams originating in that region. These seem to me to be values which we should make every effort to safeguard. The proviso now contained in the bill, declaring that the improvements shall not "be construed as creating below Sioux City any demand upon the water resources of the Missouri River Basin above Sioux City in excess of that now authorized by existing law," is not adequate since existing law does not specifically define the quantitative demands that may be made upon the water resources of the Missouri Basin for present or future projects on, or for the benefit of, the lower river and surrounding territory. Sixth. Several of the projects for the Sacramento-San Joaquin River Basin should, I am convinced, be either deleted from the bill or modified in substantial particulars. With respect to the Sacramento River project (lines 9 to 25 on p. 20 and lines 1 and 2 on p. 21), I sugguest that authorization at this time of a dam at the Table Mountain site migh be premature. I grant that preliminary studies made so far by the Bureau of Reclamation tend to show that, at some future date, a high dam should be constructed at the Table Mountain

site. However, the comprehensive investigations of the Central Valley area of California which the engineers of the Bureau of Reclamation are now making may show that no dam at all should be built at the Table Mountain site. Storage on tributaries to provide equal flood protection would, if feasible, be preferable in many ways. The decision should, I think, await completion of further engineering investigations. I am not aware of any compelling necessity for its being made at this time.

The Kern River project (lines 4 to 10 on p. 21), the plan for the Terminus and Success reservoirs on the Kaweah and Tule Rivers (lines 11 to 18 on p. 21), the Kings River project (lines 19 to 25 on p. 21 and lines 1 to 10 on p. 22), and the plan of improvement for the Lower San Joaquin River and tributaries, including Tuolumne and Stanislaus Rivers (line 17 to 24 on p. 22), should I am convinced, be omitted from this bill. Nor would it seem desirable to include the project for the Littlejohn Creek and Calaveras River stream group which, I understand, is to be considered by your committee.

Each of the foregoing projects is a logical extension of the main Central Valley project now under the jurisdiction of the Bureau of Reclamation in this Department. Moreover, each of these projects is predominantly an irrigation project. To the extent that flood control features are involved, such features should, of course, be operated in accordance with regulations prescribed by the Secretary of War, as would be required by section 5 of the bill if these projects were constructed by the Bureau of Reclamation with the assistance of flood control allocations. But since they are, in the main, reclamation projects and, in essence, part and parcel of the Central Valley project, they should be constructed, operated, and maintained by the Bureau of Reclamation, pursuant to the Federal reclamation laws. The President has, on more than one occasion, expressed the firm view that the Kings River and Kern River projects are dominantly irrigation projects and that they ought to be built by the Bureau of Reclamation. I have urged the same view many times. These considerations apply with equal force to the Terminus and Success Reservoirs, to the Tuolumne and Stanislaus River improvements, and to other similar reservoir projects in the general area of the Central Valley. The representatives of the Bureau of Reclamation will be prepared to testify in detail at the hearings concerning the relationship of each of these projects to the over-all plans for water control and conservation in that area.

Of course, what I have just said does not apply to any features of the foregoing projects which involve the undertaking of levee strengthening, bank revetment, or channel improvement work required for emergency protection against the ravages of flood. I would have no objection whatsoever to the authorization at this time of such works of this character as may be deemed necessary by the Corps of Engineers.

No element of bureaucratic narrowness is involved in stressing here the desirability of having the Central Valley Reservoir projects listed above built by the Bureau of Reclamation. The concern felt by the President, and shared by all who have a genuine interest in promoting the development of reclamation by irrigation, is obviously to the end that these projects should be planned, constructed, operated, and maintained on a consistent and harmonious basis that will accomplish the purposes for which the Federal reclamation laws were designed. The Bureau of Reclamation has long been preparing, and is now putting in readiness for submission to the Congress, plans for the development of the water resources affected by these projects in ways that will promote their highest use.

A few days ago, your committee determined that it would not permit a rivers and harbors bill to become the vehicle whereby the traditional benefits of the excess land provisions of the Federal reclamation laws would be denied to the Central Valley project in California. I hope that, actuated by the same high motives, your committee will strike these Central Valley Reservoir projects from the flood control bill, where they do not belong.

The Bureau of the Budget has advised me that there would be no objection to the submission to your committee of recommendations along the general lines of those contained in this report, but that the proposed revision of section 3 of H. R. 4485, relating to the jurisdiction of the National Park Service, would not be in accord with the program of the President.

Sincerely yours,

HAROLD L. ICKES, Secretary of the Interior.

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