Government appraisers at $20,000. The department is of the opinion that under condemnation proceedings the land would be valued at from $20,000 to $25,000.

2. The Maili Pocket tract joins the military reservation of Schofield Barracks on the north. This tract consists of 736 acres, 654.5 acres of which are owned by the Kaala Land Co. (Ltd.), which has offered to exchange this tract of land owned by the Government. This tract is valued at $40,000. The remainder of the tract, 81.5 acres, is not of great value. The owner is unknown. The War Department places an estimated value of $1,000 on this tract.

3. The Barber's Point tract is necessary as part of the defenses of Pearl Harbor. This tract consists of 143 acres. Neither the name of the owner nor the price put upon the tract is known to the department. It is not thought to be very valuable.

4. The Battery Mills tract is required for the battery and for a road leading thereto. The tract consists of 3 acres. The department is not in possession of the name of the owner or the value of the land, but believes it may be owned by the Bishop estate. 5. The Fort Shafter tract adjoins the Fort Shafter Hospital and is needed to construct buildings for the commissioned personnel of the hospital, who, on account of a lack of quarters, are required to live in Honolulu, a considerable distance from the hospital. This tract consists of 10 acres. Neither the name of the owner nor the value of the land are on record in the War Department. Mr. Rivenberg, who is secretary to Hon. J. Kuhio Kalanianaole, the Delegate from the Territory of Hawaii, and who was for a number of years before coming to Washington as secretary to the Delegate the commissioner of public lands of the Territory of Hawaii, in his hearing before the committee stated that he believes the land is owned by Mr. Damon, and that it is probably worth about $200 an acre.

No appropriation will be required to purchase any part of these five tracts of land, as the War Department has more than a sufficient amount of equally valuable land to trade for them. The enactment of this bill is necessary to give the Government the authority to make the trades. The total number of acres in the five tracts at present desired by the War Department is 1,146 acres.

Attention is called to the letter addressed to Hon. Julius Kahn, chairman of the Committee on Military A:fairs of the House, which will be found on page 3 of the hearings on the bill before the Committee on the Territories; also to Appendix A, being a letter from the Secretary of War to the chairman of the Committee on the Territories, and to be found on page 8 of said hearings.

A bill similar to this measure (S. 1021) passed the Senate on August 22, 1921. The War Department is most anxious that legislation be enacted making the transfer of this land possible.

Further evidence in support of this bill is submitted herewith in the form of a letter from the commanding general of the Hawaiian Department, which reads as follows:

From: Commanding General.

HEADQUARTERS HAWAIIAN DEPARTMENT,

To: The Adjutant General of the Army.

Honolulu, Hawaii, July 19, 1921.

Subject: Legislation relative to exchange of military lands for private lands in the Hawaiian Department.

1. In compliance with instructions contained in two letters dated June 18, 1921, the following report is submitted:

2. The substitute bill, as proposed by the chairman of the Committee on Military Affairs, House of Representatives, and quoted in your letter, will accomplish the purpose desired and contemplated in the original bill submitted by this department.

3. In connection with the discussion of Senate bill No. 1021 (see page 1443 et seq., Congressional Record, May 16, 1921), you are advised that the most urgent needs of this department at present are the acquisition of

(a) The Kalena tract at Schofield Barracks, for the purchase of which $30,000 has been appropriated, but for which the owner desires $60,000.

(b) The Maili Pocket tract, adjoining the Schofield Barracks Reservation, needed for an artillery target range.

(c) Camp sites on north and southwest shores for the training of troops and development of the plans for the defense of Oahu under the defense project. A camp in in the vicinity of Barbers Point for the training of troops for protection of this part of the island is desirable. A camp on the north shore is also necessary for this purpose. (d) Additions to existing military reservations where their development in accordance with the project for the defense of Oahu is necessary to protect the interests of the United States.

4. Of the above, the only project in which tentative but definite negotiations have been made with a view to the passage of the proposed land-exchange legislation, is the first named or the Kalena tract at Schofield Barracks. The Kalena tract is situated entirely within the Schofield Barracks Reservation. (See map herewith marked "Exhibit A.") It is now owned by Mr. L. L. McCandless, of Honolulu, and if the land-exchange legislation is passed, it is proposed to acquire this tract by three transactions, as follows:

(a) Restoration to the Territory of Hawaii, by Executive order, of a portion of the Waimanalo Military Reservation, equivalent in value to the Kalena tract.

(b) Setting aside for military purposes, by Executive order, of the Makua tract, with the consent of the governor of the Territory of Hawaii.

(c) Exchanging the Makua tract for the Kalena tract.

5. The former governor of Hawaii and the owner have assented to this procedure. 6. The character and valuations of the lands comprising, respectively, the Kalena tract, Makua tract, and the portion of the Waimanalo Military Reservation which it is proposed to restore to the Territory of Hawaii are tabulated, as follows:

(a) Kalena tract.

Appraisal made by pineapple growers and lessees of land in vicinity of the Kalena tract, March 1, 1919.

Appraisal of the Kalena tract by the Territorial tax assessor, based on leasehold values, $20,000.

The valuation returned for taxation purposes, by L. L. McCandless, and on which taxes were paid for 1919, was $40,000.

(b) Makua tract.

Appraisal by the Territorial tax assessor December 11, 1919, based on leasehold values and tax returns.

Agricultural land (without water rights), 100 acres, at $75 per acre...

Mountain land, 350 acres, at $1 per acre..

Good and bad grazing land, 2,334 acres, at $5 per acre.

Total, 2,784 acres.....

(c) Waimanalo Military Reservation.

$7,500

350

11, 670

19, 520

Portion proposed to be restored to the Territory of Hawaii in exchange for the Makua tract.

Appraised by the Territorial tax assessor, December 11, 1919, based on value of cane and other lands, leased to the Waimanalo Plantation Co., from John A. Cummins estate, adjoining the above portion of the military reservation, and tax paid in 1919. Agricultural land, 120 acres, at $150 per acre.... Grazing and mountain land, 190 acres, at $10 per acre. Swamp land, 15 acres, at $1 per acre..

Total, 325 acres..

$18,000 1,900

15

19, 915

7. The Maili Pocket tract (Map Exhibit A) is necessary, and in fact is now being used as an artillery target range. Its cost of acquisition was estimated in 1917 as $41,000, and while no definite assent of the owners to its exchange for military lands has been obtained, it is believed that an equitable agreement can be reached.

Military reservations of secondary importance under present defense plans that may be considered in such negotiations are the Keaahala Reservation and that portion of the Aiea Reservation lying northeast of the road from Honolulu to Schofield Barracks, shown on the map herewith.

8. Similarly in the matter of the acquisition of the other desired lands, as listed in paragraph 3, the department has reason to believe that these tracts, which are in general of small extent, may be obtained advantageously to the Government by exchange.

SR-67-2-vol 1—5

9. The conditions peculiar to this Territory which warrant a variation in the procedure of obtaining military lands, as compared with that established on the mainland, are

(a) The abnormal advance in the price of lands.

(b) The fact that exchange of lands between the Territory and private individuals is now authorized, but under such limitations that seldom, if ever, can the military establishment take advantage of that method of exchange in acquiring lands suited to its uses.

10. At present, if the Government needs lands owned by private parties in this Territory, two courses are open:

(a) Purchase, or condemnation, requiring special legislation, with such attendant delay that the land increases in value to such an extent, between the time of request of authority to condemn and the final judgment, that an additional appropriation becomes necessary. Furthermore, more advantageous terms can be obtained by the exchange of lands than by purchase, as, with the rapid increase in land values, due to the growth of the pineapple and sugar industries, a private owner will not sell his land for its actual value, but demands what he regards as its potential value.

(b) Conveyance of the desired private land to the Territory in exchange for territorial lands, followed by setting aside, for military purposes, of the land thus acquired by the Territory by Executive proclamation.

11. Under section 91 of the organic act, the Territory is limited in such transaction to land not exceeding 40 acres in extent, or $5,000 in value. This limitation in nearly all cases prevents the employment of this authority to meet the military requirements.

12. The proposed legislation meets these peculiar conditions and serves two purposes:

(a) It effects economy in saving the expenditure of public funds for the acquisition of additional land required for military purposes, when lands of secondary value for such purposes are available for exchange."

(b) It serves to secure the necessary additional land as quickly as is consistent with the safeguarding of the public interests.

O

C. G. MORTON, Major General, Commanding.

Mr. WADSWORTH, from the Committee on Military Affairs, submitted the following

REPORT.

[To accompany H. R. 7204.]

The Committee on Military Affairs, to whom was referred the bill (H. R. 7204) to provide a Government-owned water-service system for the Fort Monroe Military Reservation, having considered the same, report thereon with a recommendation that it do pass.

The object of this bill is to authorize the War Department to transfer certain Government property and receive in exchange for it private property owned by two companies whose stockholders, being similar, are covered by one contract as proposed under this bill. The War Department has already entered into an agreement which has been duly signed by the companies after negotiations covering a year and a half. As this agreement involves the transfer of property, however, authority must be obtained from Congress before the War Department can carry out the agreement. This arrangement anticipates the obligations of the Government under a contract signed with the companies during the World War whereby the Government installed certain improvements payment for which and the settlement of all matters under the contract of which was to be made three years after the declaration of peace.

The result of the present bill will be that the Government will obtain a plant owned and operated by itself for the supply of water to Langley Field and Fort Monroe, embracing a population of nearly 3,000 military persons and about 2,000 civilians.

A letter from the Secretary of War to the Speaker of the House of Representatives requesting this legislation reads as follows:

The SPEAKER OF THE HOUSE OF REPRESENTATIVES.

WAR DEPARTMENT, Washington, March 26, 1921.

SIR: I inclose herewith draft of legislation which is urgently needed to permit the execution of a contract which has been negotiated but which has not been approved by me, upon the advice of the Judge Advocate General that statutory authority is requisite.

The contract of December 2, 1918, with the Newport News Light & Water Co. was for development of the water supply serving Army and Navy activities in the Hampton Roads district. These improvements cost approximately $530,000. The contract provides for the sale of the improvements to the water company after appraisal, which is to be made three years after the termination of the war with Germany, and payment is to be made partly on 10-year credit and partly in 50-year bonds of the water company. The land in the Big Bethel water development, 133.8 acres, is owned by the Old Dominion Land Co., and after an option was obtained thereon improvements were installed further to supplement the water supply at Fort Monroe and Langley Field. These improvements have cost approximately $700,000, and are owned by the Government, although title to the land has not been acquired.

The pipe lines and accessories on the Fort Monroe Reservation are part of the watersupply system, and should be acquired in accordance with the agreement to sell the same at the agreed price stated in the draft of legislation.

The land company and the water company are controlled by the same stockholders, and it is therefore possible to dispose of all matters in one contract. The improvements made under the contract of December 2, 1918, have been appraised by competent engineers and the valuation has been agreed to by the water company in the sum of $200,000. The basis of the valuation is the present worth of the improvements to the water company, taking into consideration the fact that the enlarged plant has a capacity very much in excess of the present requirements for water in this vicinity. The advantages of the contract to the United States are very material. Briefly stated, they are as follows:

1. The contract disposes of the intricate problems arising under the contract of December 2, 1918, without the three years' delay required by the contract.

2. The valuation agreed to for the improvements is certainly higher than can be secured at some indefinite time in the future, after the properties have deteriorated. 3. The United States obtains cash and United States bonds for the properties instead of bonds of the water company and deferred payment on the balance for 10 years.

4. The United States relieves itself of all obligations under the contract of December 2, 1918, and especially the obligation to buy lands on which the improvements were made and to pay for new roads and new bridges, which obligations are estimated to aggregate $235,000.

5. The situation at the Big Bethel Reservoir is corrected and valuable improvements belonging to the United States are safeguarded and a valuable potential source of water supply for Langley Field and Fort Monroe is made permanent.

6. The United States acquires title to pipe lines and accessories on the Fort Monroe Reservation, which are an indispensable part of the water system serving the reservation.

7. This contract solves practically all problems arising out of water development on the Newport News side of Hampton Roads and, in addition to the release from the obligations indicated, saves the Government not less than $250,000.

It is, therefore, my urgent recommendation that the draft of legislation be enacted into law. It is requested that the proposed legislation be referred to the necessary committee of the House for consideration.

Respectfully,

JOHN W. WEEKS,
Secretary of War.

Brig. Gen. J. M. Carson, of the Quartermaster Corps, appeared before the Committee on Military Affairs in favor of the legislation and submitted the following letter, which explains the matter quite fully:

Hon. JULIUS KAHN, M. C.,

Chairman Committee on Military Affairs,

House of Representatives, Washington, D. C.

MAY 12, 1921.

MY DEAR SIR: Replying to your request at the hearing this morning, I have the honor to submit the following statement:

The legislation proposed is for the purpose of enabling the War Department to effect a settlement with the Newport News Light & Water Co. of the contract with that company of December 2, 1918, for development of water supply serving Army and Navy activities in the Hampton Roads district.