COLORADO RIVER BASIN THURSDAY, NOVEMBER 5, 1925 UNITED STATES SENATE, COMMITTEE ON IRRIGATION AND RECLAMATION, Las Vegas, Nev. The committee met, pursuant to adjournment, at 2 o'clock p. m., in the Elks Hall, Senator Charles L. McNary presiding. Present: Senators McNary (chairman), Jones of Washington, Phipps, Kendrick, Pittman, Oddie, Shortridge, Dill, Johnson, and Ashurst. The CHAIRMAN. The committee will begin their hearing in Las Vegas. Governor Scrugham, according to the list that the chairman has received, you appear as the first witness. STATEMENT BY GOV. JAMES G. SCRUGHAM, GOVERNOR OF THE STATE OF NEVADA Governor SCRUGHAM. Mr. Chairman and members of the committee: On behalf of the State of Nevada I wish to emphasize at the outset that we favor any fair and equitable plan for the development of the river. The Colorado River is an asset of all the interested States and any successful plan for its development must have due regard for the equities and rights of all the States in question. We take the position that the most economic and most feasible site for the commencement of this development is the Boulder Canyon or Black Canyon site, which you witnessed this morning. The reason for this position is primarily a structural one. Nowhere on the entire river, according to the best engineering authority, can the unit costs per unit of power generated per unit of water stored be brought to such favorable conclusions as at that site. This is a monolithic structure, due to the lava flows; that is, we do not have the broken and fractured rock and we have a most substantial foundation and at the closest distance to bedrock of any of the practicable sites which have been investigated. The second reason for advocating the adoption of the site is its contiguity to the markets for what will be produced by the dam. There will primarily be stored a very large quantity of water and holding back for the flood control of the Imperial Valley, making an additional amount available for irrigation purposes. Thirdly, and perhaps even more important, is the fact that the power generated at this point is comparatively close to the available markets. It is not only close but very much closer to the available markets, therefore giving a very much better chance of amortization of the investment in a reasonable time. I want to call your attention at this time to the fallacy of the claimants of certain sites up the river that the cost of storage per unit of height is greater than at the Boulder Canyon site. The statement "Storage per unit of height " does not mean a thing unless we have all other factors entering into it. The only proper consideration is storage per unit of cost, and not per unit of height. I want to bring out this fact again that anyone who states that the Boulder Canyon is wasteful either in money or in water is either uninformed or grossly prejudiced. I recommend a dam be built of approximately 550 feet, for this reason. Any project that is put in should not interfere with other projects that may be in the future practicable. The height of 550 feet, which will constitute a so-called high dam, will not back the water to any of the other proposed sites. It will not back it up and in any way injure the so-called Bridge Canyon site, the so-called Diamond Creek site, and others. If the height is made at 700 or 800 feet, these sites might be injured. I am of the opinion that the most economical and feasible is a dam of approximately 550 feet. That will amply take care of the provisions of flood control and I believe also of any storage requirements or power requirement that will be needed to amortize the investment. The benefit to the State of Nevada from irrigation and power will perhaps be relatively small, but nevertheless this is an asset which we regard as one of the fundamental or basic permanent assets of the State and we desire to protect it. We can probably irrigate approximately 15,000 acres of land by gravity under the most favorable circumstances, and approximately 75,000 acres of land by practical pumping within conditions which we believe we will meet during the next decade. I do not believe it to be practicable to have a royalty or taxation of power differential between power used within the State or without the State. However, I propose for your consideration this fact, to which I would like to have you give due attention. The equity of the State of Nevada and the State of Arizona in this particular site lies in their property right to the bed of the stream, it being a navigable water; that is, the bed of this stream from the high-water line to the State line in the center of the stream falls, respectively, to the States of Arizona and Nevada. I think that a concession might properly be made by all parties that a certain amount of power generated, the exact figures to be determined by a competent board, may be allocated to the State of Nevada and the State of Arizona. That would be in lieu of any royalty or anything of the kind that might be proposed. I think that this allocation can properly be made both legally and morally as compensation in full for the property rights which the State may have in the site in question. I want to make this as brief as possible, and that is all the formal statement that I wish to go in the record at this time, but I would like to be asked any question that may be properly applicable to the interests to the State of Nevada. The CHAIRMAN. Governor, what has been your life's work? Governor SCRUGHAM. I am an engineer by profession for the past 20 years. Prior to my falling from grace and going into politics, I made my living as an engineer. The CHAIRMAN. Have you personally surveyed the river? Governor SCRUGHAM. A considerable portion of it. During the past 10 years I have spent probably altogether on the river or in the vicinity of the river. The CHAIRMAN. Were you ever connected with the Reclamation Service? Governor SCRUGHAM. No, sir; in no way. I have served as State engineer of Nevada for a period of five years, having charge of the distribution of hydroelectric power within the State. The CHAIRMAN. Have you thought of the proportion that might be allotted to your State and Arizona as compensation in the way of electrical power? Governor SCRUGHAM. Yes; a dam of 550 feet, which I advocate, would generate approximately 550,000 horsepower. Of that 550,000 horsepower, I think an allocation of 150,000 horsepower to the two States, under certain requirements, 75,000 horsepower to each State, and the remaining 300,000 horsepower to be for the open market, the open market being very largely in California. The CHAIRMAN. Was such an allocation contemplated at the time of the execution of the pact by the six States in question? Governor SCRUGHAM. I was a member of the pact commission, and therefore I think I am thoroughly familiar with the steps leading up to the adoption of this pact. The first attempt by the pact commission was to allocate rights to the States. Each State's representative felt called upon to not only claim what his State should receive, but multiplied that factor expected by perhaps 5 or 10. I say that advisedly. I will admit we were guilty with the rest of them. We thought at the start it would be well to claim 750,000 allocation, and these conflicting claims, and the absurdity of some of them, made us soon realize that it would be very, very difficult to scale down to what we actually deserved, and then the suggestion was made that instead of attempting at this time to allocate exactly the rights of each separate State, that we divide ourselves into the natural grand divisions, namely, the upper basin and the lower basin, and that at some subsequent time as economic developments warrant, then the upper basin States get together and could allocate between themselves, and the lower basin States should get together to an allocation or agreement between themselves. I regard it as absolutely essential to any development in this project that the lower States, namely, California, Arizona, and Nevada, come to at least an understanding as to the general forces to be involved in the distribution of water and power between the States. I believe that can be done, if it is approached in a spirit of fair play. I am quite certain it can be worked out. The CHAIRMAN. The dam that would be necessary to construct at Black Canyon in order to handle the water, you assume the money for it would be advanced by the Government? Governor SCRUGHAM. Up to the flood-control limit; that is, it is properly a function of the Government, particularly in view of its large ownership of public lands, and, in fact, control of public lands, to take an interest in these things, and therefore we believe it is a function of the Federal Government and of the Congress of the United States to provide money for flood-control purposes. The CHAIRMAN. Then you advocate the Government paying for the whole of the cost of the construction without repayment? Governor SCRUGHAM. No, sir. To be later amortized, probably over a long period of time, by the benefits accruing. The CHAIRMAN. That is what I am getting at. The State of Nevada is to receive, under your allocation, 75,000 horsepower per annum? Governor SCRUGHAM. Yes, sir. The CHAIRMAN. Arizona a like allocation. Are these two States then to aid in the return of the money to the Government? Governor SCRUGHAM. Yes, sir; in the same proportion and in the same manner with the remaining 300,000. I wish to make it clear that this would have to be spread over a long time amortization in order to make it feasible. Senator PHIPPS. Governor, you mean the remaining 400,000? Governor SCRUGHAM. Yes. Did I say three? I should have said four. Senator KENDRICK. Was it your thought, Governor, that after the cost of construction had been returned to the Government, each of these States, say Arizona and Nevada, should have an interest in the dam? Governor SCRUGHAM. Yes, sir: in the administration. That would eventually come about. Senator KENDRICK. In proportion to the power allocated? Governor SCRUGHAM. Yes, sir; after the Federal Government's interest had been amortized. Until that had been amortized, I should say they would have the controlling interest. The CHAIRMAN. I am interested in that viewpoint. The controlling interest in what? Governor SCRUGHAM. In the control and sale-I would like to amplify my suggestion. In the administration of the harbor of New York it is carried on by what is known as the Port of New York Authority. The Port of New York Authority is a joint venture of the States interested, namely, New Jersey and New York, in which the Federal Government also has an interest. As an analogy, the investment of the Federal Government in this flood control through an agency corresponding to the investment of the Federal Government in the dredging facilities in the harbor of New York. The profits derived from the dockage privileges and wharfage privileges are administered by this Port of New York Authority, and can be made similar to the revenue derived from this project, such as sales of power, the water for irrigation, perhaps, and we think we have a legal ownership which is already established and I think it may follow that same course, and I think it is not necessary to construct a new agency. There may be such existing now in the State's public service commission without the enactment of additional legislation that could administer this, whatever the name adopted for it. The CHAIRMAN. After there has been a return to the Federal Government of the money advanced to handle the water, you think the States of Nevada and Arizona should have control? Governor SCRUGHAM. Yes, sir. The CHAIRMAN. In the administration of the property? The CHAIRMAN. But you would not ask a further allocation of water? Governor SCRUGHAM. Not at the present time. At least not within the life-we can not legislate or we can't plan intelligently for 50 or |