ANNEX A. DEPARTMENT OF THE INTERIOR Washington, D. C. HON. FRED K. NIELSEN, April 10, 1923. Agent for the United States American and British Claims Commission, Department of State, Washington, D. C. DEAR SIR: At your request, I am submitting the following statements regarding the Rio Grande claim, preceding these with data as to my experience and qualifications to express an opinion on the engineering and economic points involved: Experience. My education and early experience was that of a mining engineer. I graduated in 1885 from the Massachusetts Institute of Technology. Before graduation I had experience in connection with mining in Pennsylvania, Virginia and Colorado. I also took a post-graduate course and made special investigations on the porosity of rocks; these investigations being of use in connection with subsequent work on the foundation of dams and other structures. On October 2, 1888, Maj. John Wesley Powell, Director of the U. S. Geological Survey, because of his familiarity with my education and experience, appointed me as Assistant Hydraulic Engineer in charge of certain details in connection with the development of methods of stream measurements, these being preliminary to the investigations of the extent to which the arid region might be reclaimed. My first work was on the Rio Grande; temporary headquarters, were located at Embudo, New Mexico, where river measurements were initiated, and from whence points of observation were located on the Rio Grande and its tributaries. At that time also, I was instructed to begin a reconnaissance for suitable locations for reservoirs and to make preliminary studies for the location of storage dams. Subsequently I was appointed Chief Hydrographer, in charge of all river measurements made by the U. S. Geological Survey. This position I held for nearly 20 years, or until my duties as Chief Engineer of the Reclamation Service prevented further personal attention to these details. In December, 1888, arrangements were made by the Director of the U. S. Geological Survey with Maj. Anson Mills and Mr. W. W. Follett to carry on observations on river flow, the amount of sediment carried and other details, on the portion of the Rio Grande in the vicinity of El Paso, Texas. This practically marked the beginning of my contact with General (then Major) Mills. The data collected by him were subsequently prepared for publication, together with other material coming under by observation. The measurements of the Rio Grande and other rivers of the West were continued under my immediate direction. As one of the outgrowths of this research various laws were enacted by Congress regarding reservoirs and irrigable lands, and on June 17, 1902, the Reclamation Law was approved. Immediately after I was appointed Chief Engineer, retaining general supervision over stream measurements. I remained as Chief Engineer until 1907, when I became Director of the Reclamation Service, with Mr. Arthur P. Davis as my successor as Chief Engineer. I held this position until 1914, and then was designated as Consulting Engineer. During this time, from 1888 to 1902, while in charge of hydrographic investigations, there were expended under my direction nearly $2,000,000 in the measurement of streams, surveying of reservoir sites. and similar investigations. In the time from 1902 to 1914, while Chief Engineer and Director of the Reclamation Service, the expenditures on surveys, examinations, construction and operation of canal systems aggregated over $80,000,000. In addition to this work I have made many investigations on the general subjects of irrigation and have prepared various statistical reports for the Census Office bearing on the cost and value of irrigation works and irrigated lands. As one of the early officers of the National Geographic Society, and its Secretary for a number of years, I gave special attention to western problems of land and water development. For some time subsequent to this I was Secretary of the American Forestry Association, and was active in research work with reference to the influence of forests on river flow and on other matters bearing upon water conservation and use. As a member of President Roosevelt's Inland Water-Ways Commission, I studied the navigable streams, particularly as to the problems of water storage; also, as an active member of many scientific societies, I have served on various committees: for example, those of the American Society of Civil Engineers, and of the American Society of Mechanical Engineers. I am a Past President of the Washington Society of Engineers; Past Vice-President of the Washington Academy of Science; Past President of the American Association of Engineers, and have written quite extensively on irrigation and water supply, both in pamphlets and official reports; also in privately published books, notably a volume on "Irrigation in the United States"; and one on "Principles of Irrigation Engineering." My work in connection with the development of reclamation in the United States is described in the autobiography of Theodore Roosevelt. In addition, I have served as Consulting Engineer for the Canadian Pacific Railroad on its irrigation system; one of its larger reservoirs is called "Lake Newell." With my personal acquaintance with conditions on the Rio Grande since 1888, and a wide knowledge of western conditions of irrigation development, both from its engineering and economic sides, it is possible for me to give certain opinions concerning the questions at issue. Character of Claim. There is nothing now available which indicates with any considerable degree of accuracy the full character and extent of the Rio Grande claim, other than the memorial signed by Cecil J. B. Hurst, British Agent, and others (undated), on page 48 of which it is submitted that His Britannic Majesty's Government is entitled, on behalf of the Rio Grande Irrigation and Land Company, Ltd. (the English Company), to compensation on the following: 1. Debentures and Shares. 944 debentures, of par value of £50 each. Interest on the par value ($377,400) of debentures and 30,500 cumulative preference shares 300,000 ordinary shares of £1 each shares at 4 per cent from 1905; Also the principal sum of £330,500 £47,200 30,500 300,000 330,500 2. Claims for Indeterminate Amount. A further sum is claimed (a) in compensation for the cancellation of certain alleged rights; also to repay the claimant's costs, and to compensate them from being deprived for 23 years of the value of the debentures, and (b) the profits from sales, settlement and development of irrigable lands, and (c) supplying water for domestic use and hydro-electric power to the city of El Paso, Texas, and other localities. These lands are referred to in the prospectus, beginning on page 56 of the memorial, as being "Valley lands, 230,000 acres; Mesa lands, 200,000 acres or more." The valley lands, it is stated, include 48,000 acres already irrigated, of which 20,000 acres were in New Mexico, and 28,000 acres in Texas and Mexico. These lands had a prior right to the natural flow of the Rio Grande. The mesa lands were to be watered by means of a high-line canal, to be built after the low-lying lands had been brought under settlement. Enterprise Financially Unsound. The enterprise thus outlined in the prospectus, as printed in the memorial, was financially unsound. This fact was recognized by some experts at the time, and is now generally appreciated. The promoters proposed to go into a partly developed country where land values and crop production depended upon the water supply, and where this supply was variable, uncertain and often inadequate; and where the vested rights of its use had not been determined, nor limited by the courts, but where each claimant, individual, association or corporation, would fight fiercely for his maximum claim. The investors were practically invited to buy into a series of law-suits in which the original land owners then in possession would have every advantage. The claim is made that the promoters, The Rio Grande Dam and Irrigation Co. (the American Company), secured the only feasible reservoir site on the Rio Grande in southern New Mexico, this being at Elephant Butte, and with a capacity of over eleven billion cubic feet, or a little over 250,000 acre-feet. This proposed reservoir was of such small capacity as to add at times to the difficulties and uncertainty of water distribution, rather than to aid in these; the evaporation from the surface in dry years would result in a net loss of water otherwise available, and belonging to the older claimants. The scheme proposed in the prospectus in effect was to store a portion of the erratic floods of the Rio Grande and by control of such storage, and the advantageous position thus secured to induce the land owners to trade part of their lands for water. This undertaking was full of uncertainty, as the result might be that the owners of the lands, and of the prior water-rights, instead of being at the mercy of the company, would have a distinct legal advantage over the company. Time also would run in favor of the land owners because they could afford to wait for additional water, as they had been doing for a generation or more, but the investor could not afford to wait; any considerable delay in the settlement of the land and in the returns to be received from it would result in the piling up of interest charges greatly increasing the estimated costs, also in loss through depreciation of the works. The prospectus claims that the acquisition of this reservoir site gave the company control of the entire flow of the Rio Grande in southern New Mexico, and thus to a great extent the control of the irrigable. lands. As just indicated, the reverse may have been equally true. The company did not own the dam site, nor the most important part of the reservoir site. The approval by the Secretary of the Interior of the map showing the location of the desired right-of-way to flood certain vacant public lands had no use nor value unless the more important privately-owned lands were obtained. In the same way, the filing of claims for the storage and use of the flood waters, in compliance with the laws of New Mexico, did not confer ownership of these waters, but merely gave the company a certain time to perfect. their works and to make arrangements for disposing of the water to the landowners. Other filings could be made by other claimants, and ultimately the relative rights to the use of the ordinary flow and of the flood waters had to be adjusted in the courts. It is noted that so far as shown by the documents submitted, no rights had been acquired to the great area of privately-owned lands needed for the perfection of these claims, as for example, on the socalled "Armendaris Grant" containing the dam site. These lands. were subsequently purchased by the Government from the Victorio Land and Cattle Company, for $199,097.25, after considerable litigation-the owners demanding $600,000. The approval of the right-of-way for canals by the Secretary of the Interior, made in accordance with the requirement of law that he approve any such plan when properly submitted, related only to the right to occupy certain designated portions of vacant public lands, and conferred no rights with reference to the private land over which the main portion of the system of irrigation had to be built. Nor did it give any right to interfere with the other proposed irrigation canals the rights of way for which had already been approved, or which were then in use. It is further stated in the prospectus that many of the owners of the irrigable lands have contracted to convey one-half of their lands |