Mr. MICHENER. Is there not a distinction to be drawn there? Every one of those appropriations was based upon the fact that an act of God had distressed a certain locality or group of people. To-day the prices of farm products are uniform, so to speak, throughout the Nation. If we attempt to help the group affected by low prices, we must help the whole agricultural group. In the other instances, we were helping the group which the act of God distressed. Mr. SMITH. Is it not an act of God that we had only 50 per cent of the ordinary snowfall in the Rocky Mountain region last year and the year before and that we get only 6 or 8 inches of rainfall instead of 50 inches, such as you get in this section of the country? Mr. MICHENER. There are some projects affected in that way, but many of them are not affected in that way. They are all affected by the prices. Mr. GREENWOOD. There are some projects that can pay these installments, and it seems that discretion should be lodged in the Secretary of the Interior to furnish this relief or administer this relief only to those that are delinquent and can not pay. Mr. SMITH. I will say to the gentleman that the Secretary of the Interior recommended legislation of that character, and it was brought to the attention of the committee, but the set-up or administration of the law was such that it would take probably six months to get all the data necessary. This is an emergency, because if the water is not available to these projects by the 1st day of April the crops will begin to suffer. Mr. MARTIN. Why would it take six months to collect that data? Mr. SMITH. Because they would have to go on the project, take a census of the people, and would have to find out from each individual how many cows he has, how much he owes, and so forth. That data would have to be collected on the various projects. Mr. GREENWOOD. Where the money is furnished from the Treasury by the Federal Government, we ought not to provide relief for people who can make the payments. Mr. SMITH. In the administration of the laws I referred to, there was no discretion. It was a simple proposition that applied to everybody. Mr. MARTIN. They had to be in distress or they could not get it. Mr. GREENWOOD. At the same time, it was administered so as to give relief to those that needed it, and they should not be permitted to take it simply because it is available. Mr. SMITH. We are asking the Federal Government to give us this extension and relieve these very needy and worthy people. We are not asking for a new loan, or anything of that kind, but we are simply asking that our 90-day note be extended to six months. Mr. MARTIN. You will be taking money out of the Treasury for a year, and in some instances for 10 years. Mr. MICHENER. You are not taking money out of the Treasury, but you are keeping money out of the Treasury that belongs there. Mr. TAYLOR. We are keeping money out of the Treasury that the Treasury can not get because the water users have not got it, and they can not get it to pay. Mr. Cox. Has the thought occurred to you that it might be possible to provide that these deferred payments might carry interest or draw interest? Mr. SMITH. That has been suggested here, but it would complicate the accounting in such a way that it was thought that it would not be wise. Mr. MICHENER. You would ont want that under any conditions for the reason it would go to the fundamentals oft he Reclamation law, which does not provide for the payment of interest. If interest were provided here, Congress might come along later and say, "You should not have any of this money without interest, and interest should be attached to all of it." Mr. SMITH. Interest is not carried in this bill, but on other legislation we do require, with the hope of forcing them to pay, that they be charged with interest on delinquent payments. However, here is a case where they have not the money, and they simply can not pay it. They do not have the money and they can not borrow it. They can not sell anything so as to get it. This only authorizes the Secretary of the Interior to allow the water, which is going to waste, to be put on the land so they can raise crops and sustain themselves and meet their obligations. Mr. Cox. I think if there were a statutory provision that these payments should draw interest, you would find in many instances that it would be possible to get along without it. Mr. MARTIN. That might prevent a man who could pay from getting the benefits of this provision. Mr. GREENWOOD. And considering the whole period, they might pay sooner. Mr. SMITH. We talk about making these men pay interest, and if they do not pay interest, what happens? We all realize that thousands of farms and homes are being foreclosed now because the people can not meet their interest payments, and these people here are in that condition. There is no use in putting on penalties which they can not possibly pay. Mr. PURNELL. If they can not make the payments next year, will you come back and ask for the same kind of relief? Mr. SMITH. I hope we will not need to come, but if the country is not in a better condition next year than it is now, Congress will be a lot more concerned over the situation than they are at the present time. Mr. PURNELL. Because the payments may be deferred under this program to the end of the contract period, that should not affect the farmers if they are able to make the payments. They should not ask for any of the remedy provided for the others. Mr. SMITH. It is our hope that it will not be necessary to ask for any consideration next year. We are hoping that the prices of farm products will be higher and that industry will come back and improve the market conditions. Mr. MICHENER. As a practical illustration, let us say that this piece of paper represents a drainage district that would be affected under the Smith-Glenn bill, and that this piece of paper adjoining represents the reclamation project that would be affected by this bill. Now, if the Smith-Glenn bill should become operative, then there is a moratorium declared for five years, but those people must pay interest during the whole period of that moratorium on the amount used, while the other people, for whom you are appearing, would get a moratorium which would amount to 10 years without interest. Mr. Cox. Those other groups to whom the Government has been extending aid in the way of loans have been charged with interest, and this is a loan. Mr. SMITH. The Government reclamation projects were taken up by the Government in order to reclaim its own land. It was to reclaim land on the public domain, which was lying idle, with this great resource of water flowing to the sea without being used. Congress in its wisdom initiated this policy of improving its own property and to make these barren wastes into something that would be productive. In those other cases, embracing drainage projects, the expense of maintenance as well as the original cost were small in comparison, and those projects were closer to the markets. Mr. MICHENER. I do not want you to understand or feel that I am opposed to these things, but like all other human beings, I realize that self-preservation is the first law of nature. My farmers do not have the assured crop that yours have, and yet they are a part of the great Commonwealth, and they are paying taxes. For that reason, I would be doing an irreparable injury to my own people if I were to aid in the further development of reclamation projects. Mr. BANKHEAD. Your farm products come into competition with theirs. Mr. MICHENER. If you go to any store in Washington, you will find Idaho potatoes. They are selling potatoes of no better quality than Michigan potatoes, but they can be produced and shipped here at a price less than we can produce them for. The same things is true of apples that are shipped from Washington. Mr. SMITH. If it were within your power to wipe out of existence these 213 cities and towns, with schools and churches, on irrigation projects out in that western country, which contributes so much to the prosperity of the people of Michigan, would you want to do it? Mr. MICHENER. No; but I want those people to take the same chances with like people in Michigan. Mr. SMITH. Probably your constituents who are worrying you do not understand that our money is being paid to your factories which in turn finds its way to them through the artisans and workers they feed. Mr. MICHENER. They understand where the markets for these farm products has gone. Mr. SMITH. But they do not realize that they are getting the benefit of what we purchase out there with the money that we spend in Michigan for the things that you manufacture. Mr. MICHENER. But there is a distinction between the manufacturer in the city of Detroit and the farmer living on the land. Mr. SMITH. There is no distinction, because one depends upon the other. The other day Mr. Taber, the head of the National Grange, appeared before our committee with a well-prepared address, which he proceeded to deliver in his most eloquent manner against legislation extending the irrigation area. He had not proceeded for more than five minutes before the committee discovered that he had considerable to learn about the reclamation policy. I came from the same locality in Ohio that Mr. Taber came from, and I said to him: Mr. Taber, you come from Barnesville, Ohio, where there is a large glass factory that manufactures window glass. Do you know that several thousand carloads of window glass manufactured at Barnesville are furnished each year to the people on the irrigation projects, and that the money that we send to Barnesville, Ohio, for that glass goes into the hands of farmers in that locality? Of course, the reason they have a market there for what they produce is because of our building farm homes, towns, and cities on what was once a desert waste. I thank you for your attention. The CHAIRMAN. Mr. Taylor, we will be glad to hear you now. STATEMENT OF HON. EDWARD T. TAYLOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO Mr. TAYLOR, Mr. Chairman, and gentlemen of the committee, what your committee wants to know is, first, the fairness, justness, and reasonableness of this bill, H. R. 9489, and second and very definitely as to the actual necessity for its enactment at this time. I will speak first as the Representative in Congress from the western half of Colorado, which includes the Uncompahgre Valley reclamation project and the Grand Valley reclamation project; both of which are in my congressional district. I live in an adjoining county to the three counties in which those two projects are situated, and have known those people and their conditions intimately and have represented them in this House for the past 23 years. I hesitate somewhat to picture for a public record the actual conditions of the water users on those two projects as seriously as they really are at this time. Those water users have kept going during the past few years by absolutely forcing in every way possible payments from the people on the projects and practically compelling them to make payments of money, much of which had to be borrowed in every way possible and little of which has been repaid or can be repaid at this time. On the Grand Valley project some seventy-odd water users have been compelled to deed their farms to the Water Users' Association in order to get water during the past year. They have not been able to sell their crops and they can not make the payments necessary to secure a reconveyance to themselves of their titles to their homes. I am advised by the bankers and many substantial people living upon and adjacent to that project, that the water users have completely exhausted their credit. They have no collateral that is not already mortgaged for probably more than it could be sold for. Several banks upon those two projects have suspended or have been closed, and the remaining banks say they can not make any further loans to these water users under the existing conditions. The Uncompahgre people have not deeded their lands to their association but they are in equally, if not more, serious condition; that is, the water users on both projects are facing utter ruin unless they can be relieved for the present from their indebtednesses to the Government and be given an opportunity to raise another crop this year. Even their working stock and farming implements and practically all of their personal property are mortgaged; and if those mort gages are foreclosed, they will be put out of their homes and set out in the world with nothing. Notwithstanding the severe drought a fairly good crop was produced last season, but, due to market conditions, the settlers have been compelled to sell their crops for much less than the actual cost of production; besides, they can not find a market even at any price for much of their crop, sufficient to pay the freight and leave them any balance at all. The banks can not possibly even furnish working capital to the water users to purchase the necessary seed and feed during this year. Gentlemen, it is absolutely imperative that Congress should extend such deferment of the payments upon the construction charges as to make it possible for the people under these projects to live and stay on the land. They must not only be permitted to live and raise their crops this year, but even if they do raise a good crop this year and if they do succeed in getting a fair price for it, every dollar of the proceeds will be consumed in paying existing obligations and paying for the operation and maintenance and upkeep of lateral ditches, flumes, and so forth, and it will be utterly impossible for them to pay construction charges in addition to all that, and live during the coming year. They absolutely must be allowed to have some surplus to clothe and feed themselves and families not only during 1932 but to purchase seed and carry on during 1933. The least possible relief that would afford a faint hope to the water users on these two projects in my district would be to grant them the relief provided in this bill. While there ought to be a straight moratorium for the years 1931, 1932, and 1933, to let them get on their feet again, yet we are not considering 1933 in this bill. The relief that we are now asking, although not being all I think they should have, will be a great encouragement and will give the sorely distressed water users some hope of a possibility of paying out. There is a human equation involved in this situation, and I speak now of all of the water users on all of the Government projects throughout the Western States. The settlers upon those projects must be given a fair chance for their very existence and a fair opportunity to supply their families with at least the bare necessities of life. Anything short of that destroys their courage and morale. Not only the banks but the business men and merchants of those communities have extended all the credit they possibly can and as long as they can, and they are now compelled under existing financial conditions in our country, to absolutely refuse further credit. Those settlers have tried heroically and with the utmost energy and frightfully hard work and good faith, for years and years, to cooperate with the Reclamation Bureau in every way possible. Those people are not repudiators, nor are they disposed to complain of their lot or be trouble makers. But the plain fact is that they have reached the limit of their endurance. They are now at a point where they simply can not comply with the Government requirements and continue to live. It does seem to me that Uncle Sam and Congress both should and must recognize that there is a personal side and a human element in this situation. Those projects can not continue without farmers. and farmers can not carry on with the crop prices they are now having, and with the many handicaps and discouragements that they are working under, unless they can obtain more liberal consideration |