Senator JONES of Washington. Yes. Well now, then, does he repay the cost then, or does he get it simply upon an interest basis or a maintenance basis at the end of 50 years?

Mr. CARR. The bill contemplates that after that time he only pays the operating expenses. The Government having got back its entire investment in the dam.

Senator JONES of Washington. Well, suppose that at the end of 50 years here is another interest that makes a better bid than his, and wants to get this power. Can the Government take advantage of that?

Mr. CARR. In just the same way that the Federal water power act provides. The Government could either recapture or allow some one else to recapture upon paying the net investment of the allottee.

Senator JONES of Washington. Well, in other words, at the end of 50 years his right there terminates?

Mr. CARR. Yes but upon payment back of the investment there is a fair protection.

Senator JONES of Washington. Yes; I understand that. He has you might say, a preference right, but the Government can terminate his rights; his rights are terminated at the end of 50 years and he has got to renew?

Mr. CARR. Yes; but only upon full compensation.

Senator KENDRICK. Well, do they not terminate under the Federal water power act also?

Mr. CARR. Yes, they terminate but there is an absolute right to a renewal unless compensation is made for the net investment. Senator KENDRICK. And it is proposed to have this apply in the same way?

Mr. CARR. We try to make it the same, as nearly as we can, except there is one section that treats political subdivisions a little differently, but I don't think there is any real difference, because the right of eminent domain exists, and a political subdivision outside of the State of its creation is not exempt from the exercise of this power.

Senator KENDRICK. During the first 50 years upon whom does the responsibility of maintenance fall? The Government or the purchasers of the waterpower?

Mr. CARR. Of the dam?

Senator KENDRICK. Yes.

Mr. CARR. The responsibility of maintenance of the dam will always rest on the Government. The first 50 years and the first 100 years and the first 200 years. But the rights of the allottees of power at the dam will be conditional upon their contributing their share so that the Government is paid. But the Government will always be the agency controlling the water at the dam.

Senator KENDRICK. Well, in framing the bill we ought to bear in mind that those reservoirs are going to fill up very much more swiftly than anybody has ever estimated and that ultimately it is to be a power plant and not a reservoir largely.

Mr. CARR. That is true, although it will take 300 or 400 years before this reservoir will be filled.

I did want to say just a few words about the history or background of the project. I will abbreviate this as much as I can. As early as 1907 Theodore Roosevelt sent a message to Congress

recommending that a big reclamation project be authorized in Imperial Valley, and a canal be built connecting Imperial Valley with the river, and that storage works be built. President Taft afterwards sent a communication to Congress and in 1918 a board was created under contract between the Secretary of the Interior and the Imperial Irrigation District to investigate the all-American canal. This board reported, and hearings were held on legislation carrying out their report, but Congress felt like there was not enough evi dence and facts before it as to the possibility of storage in the headwaters, so it passed a bill in 1920, made an appropriation, and directed an investigation. This was made, and it was a very careful one, and as a result the Secretary of the Interior reported back to Congress in 1922. This legislation simply carries out the plan there recommended. So that the plan has developed rather naturally under Government auspices.

Senator ASHURST. What is the reason for delaying to construct the all-American canal? It would be entirely in California, would it not? What are the legal difficulties, if any?

Mr. CARR. Well, here is the difficulty. With regard to the allAmerican canal, that question will be answered by others more familiar with it than I am, but I think I can answer it rather generally. The all-American canal is really a cooperative canal that will serve the Imperial district, the biggest irrigation district probably in the United States, a big strong irrigation district, which will pay a large part of the cost; it will serve the Coachella Valley district, a big irrigation district, which has a large amount of land within its limits. It will also serve a small amount of privately owned lands and a big area of publicly owned lands. The only way you can get people together to carry through a project of that kind is by having the Government act as the agency for all. But that is a question, Senator, that will be covered fully by others. It is a little out of my domain. I would rather leave that to others to discuss.

Senator ASHURST. Very well.

Mr. CARR. Now, ever since it became known, way back in 1921, that the Reclamation Service contemplated recommending a major development at Boulder Canyon, there have been a lot of counterplans of development put forward.

First, it was suggested that there ought to be a major development at Glen Canyon, near the boundary line of Arizona and Utah. That had quite a little consideration for a time, and then on investigation it appeared not to be feasible; that it was too far from the power market to make it economically desirable, and there was a good deal of doubt as to the walls of the dam being such as to sustain a great structure.

And from then on there have been many plans suggested. One of the most recent ones has been to put in a flood-control dam entirely at Government expense near Needles or Mohave. That has been investigated, and Mr. Davis and some of the witnesses who are better qualified than I am will point out that it is not feasible. I don't think you hear very much about it now. And all the time there are these counterplans and projects coming up. They have been coming up in a steady succession ever since it became known that this one was under consideration. And it is sometimes rather confusing, but

we will endeavor, through the technical witnesses, to show that all these different plans have rather dropped to one side, and that this project stands out as the one carefully investigated and matured project.

Now, with your permission I am going to make something of a legal argument. It is somewhat dry and somewhat uninteresting, but I think it will save a lot of time. You will be surprised at the time of the House hearings that was devoted to a consideration of the so-called Colorado River compact and the effect of its nonratification by Arizona. I attended a good many of the House hearings, and it really seemed that when there was a witness who was an engineer or a farmer there was sure to be an argument between the witness and the committee on the legal effect of the compact. Now, after careful consideration it has seemed to us that a statement of our position at the very outset would be in the interest of timesaving. I am sure you would be interested in knowing our position, Senator Kendrick.

Senator KENDRICK. I certainly will, so far as I am concerned, because the ratification of that compact is of the utmost importance to my State.

Mr. CARR. Well, we think we can give you substantially the same thing, and there are some excellent lawyers here who can tell you about this.

The CHAIRMAN. Well, is it proper in these proceedings to go into the matter of rights to the water between the seven States?

Mr. CARR. Yes.

The CHAIRMAN. Congress has exhausted its jurisdiction over that subject matter. We had hearings before this committee about four years ago regarding that line.

Mr. CARR. Well, it is necessary, Senator McNary. I am sure that I am going to save time, and I am sure that it is necessary. It is a question that can not be avoided, and a discussion of it at this time will be logical and helpful.

Senator JONES of Washington. Do you think that you can work it out without the ratification of that compact by Arizona?

Mr. CARR. Yes, sir; I have no doubt of it, and some good lawyers appeared before the committee over on the other side and expressed their opinion that it could be done. Among others Mr. Stephen B. Davis.

Senator JONES of Washington. I just wanted to find out if that was your viewpoint.

Mr. CARR. Yes; and I can state the reasons why it can be done. I think you all know what the Colorado River compact is. Representatives of the different States were appointed, and they met, and they negotiated a compact which was signed by the representatives of the States at Santa Fe in 1922, and it was promptly ratified by the legislatures of six states, but Arizona has thus far refused ratification. So that the compact as yet is of no effect. It is purely inchoate. It has subsequently to be retified by Congress, but it has always been assumed that if all the States ratified it, Congress would.

Now the position of the upper basin States-and I will endeavor to state it fairly; it is a reasonable position, and we find no fault

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with it is this: They say that in the upper basin States that economically they are not so far advanced as the lower basin; that their development will probably be later in point of time; that it looks as though the lower basin would have a tendency to develop first and use the waters of the Colorado River first.

The United States Supreme Court about two years ago in the Colorado-Wyoming case laid down the principle that in these western States where the doctrine of appropriation of water rights exists, that State lines will be disregarded, and that water rights on an interstate stream will depend upon priority of appropriation and use. That is to say, if a user applies for an appropriation, and gets it, and devotes the water to a beneficial use in the lower basin he acquires a right that can never be taken from him. And the upper basin States say that it is unfair and wrong for the Federal Government to use its agencies and its credit to put in a major project in the lower river under which permanent rights to use the water will be created so that ten, twenty, fifty years from now when Wyoming and Colorado and Utah may in the orderly course of their development desire to use water, which, we will say, is fairly attributable to them, they will be met with the proposition that vested prior rights have been created in the lower basin States.

Is that a fair statement, Senator?

Senator KENDRICK. That is perfectly clear, and in addition to that I want to say that there is another thing besides the unfairness of it all: It is the uneconomical use of the water. When we employ the water for irrigation on the upper stratas or levels we simply provide that much more storage for you people lower down.

Mr. CARR. Yes. Well, I will not argue with you at all upon the statement of the proposition I have made, or upon the last one made. Senator KENDRICK. But you have stated the case exactly.

Mr. CARR. I tried to state the case fairly with regard to the upper States.

Now, what they are mostly afraid of is not the use of water for irrigation below, but the use of the water that will be stored at this great reservoir for the generation of power, because if the Government builds a reservoir and grants power rights by contract, and the different allottees put in their plants and run the water through their turbines, this is a beneficial use of the water, which might result in their acquiring a right to all the water of the river and which would tie up the Northern States. And I can appreciate the position among Representatives of the Northern States. They must look after the interests of their own people.

Now, we very frankly say that this Colorado River compact constitutes a very satisfactory method of settling these rights between the different States. We make no argument on that. We recognize it. But our position is that it is not a sole or exclusive method of protecting the upper States in their rights. We say that in a measure such as this that Congress has the power, by an appropriate provision in the bill, to extend full protection to the upper States, and it is to that provision I wish to address myself particularly.

We prepared and submitted to the House committee a form of reservation expressing our ideas. I will state briefly our theory-The CHAIRMAN. You wish to put that in the record?

Mr. CARR. Yes.

The CHAIRMAN. Very well.

(The form of reservation presented by Mr. Carr for the record is here printed in the record in full, as follows:)

SEC. 8. That the United States in managing and operating the dam, canals, and other works herein authorized, including the furnishing or delivery of water for the generation of power, irrigation, or for other uses, shall observe and be subject to and controlled by the compact commonly known as the "Colorado River compact," between the States of Arizona, California, Colorado, 'New Mexico, Nevada, Utah, and Wyoming, as executed at Santa Fe., N. Mex., on November 24, 1922, by representatives of said States, and approved by a representative of the United States when the same shall have been ratified by all of the signatory States and approved by Congress, or any other compact between said States and approved by the Congress, apportioning or regulating the use of the waters of the Colorado River, herein for convenience designated compact."

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That pending and until the ratification and going into effect of such compact the United States shall observe and be subject to and controlled by all the provisions and stipulations respecting the apportioning, appropriation, use, and delivery of the waters of the Colorado River as contained and expressed in said Colorado River compact, herein for convenience termed "Santa Fe compact," as executed at Santa Fe, N. Mex., on November 24, 1922. For the purposes of this section the expression "Santa Fe compact' shall be deemed to refer to the compact above in this paragraph referred to, but modified to provide that the date for the commencement of the measurement of water be the 1st day of October after the passage of this act, and also to provide that surplus waters referred to therein be deemed subject to the rule of equitable division as between the States.

A. Also, all rights of the United States in or to waters of the Colorado River used in connection with, regulated by, or arising out of the project herein authorized, whether by appropriation under the laws of Arizona, Nevada, or California, or otherwise, as well as the rights of those claiming under the United States, shall be subject to and controlled by such compact" and, pending and until the ratification and going into effect thereof, said "Santa Fe compact."

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B. Also, all contracts, concessions, leases, permits, licenses, and other privileges from the United States, or under its authority, concerning the use of said dam or other incidental works or water stored thereby for the generation of power or other purposes, shall be upon the express condition and with the express covenant that the rights of the recipient or holder thereof to the use of the waters stored by said dam shall likewise be subject to and controlled by such "compact" and, pending and until the going into effect thereof. said Santa Fe compact."

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C. Also, all contracts, concessions, leases, licenses, permits, or other privileges from the United States or under its authority concerning the delivery or use of waters of the Colorado River from the canals herein authorized shall be upon the express condition and with the express covenant that the rights of the recipient or holder thereof to such waters shall likewise be subject to and controlled by such " compact" and, pending and until the ratification and going into effect thereof, said " Santa Fe compact."

D. Also, all rights of way or other privileges from the United States or under its authority in respect to the public domain and necessary or convenient for the use of the waters of the Colorado River at or below the northern line of Arizona as well as for power plants at or transmission lines from said dam, shall be upon the express condition and with the express covenant that the rights of the recipient or holders thereof to waters of said river for the use of which said right of way or other privilege is necessary, convenient or incidental, shall likewise be subject to and controlled by such compact" and, pending and until the ratification and going into effect thereof, said "Santa Fe compact."

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E. The conditions and covenants referred to in subdivisions B, C, and D shall be deemed to run with the land and the water right, and shall attach as a matter of law, whether expressed in the instrument evidencing the pr ̊vilege or rights or not, as shall also the limitations upon claimants under the United States referred to in subdivision A.