Mr. FERNANDEZ. Is that the only one you had opposing? Mr. MCBRIDE. In our files? Mr. FERNANDEZ. Yes. Mr. MCBRIDE. I believe that is the only letter than opposes it in toto. I will tell you what I have. I have some people that opposed it because they thought we were too liberal. Mr. FERNANDEZ. A lot depends on what you mean by liberal, of course. Mr. MCBRIDE. In our bill, for example, we propose that the irriga tion features be repaid by the water users in 50 years with interest after the 50-year period. So our people said the old traditional 40 years is good enough for us, and we do not want it to go beyond that. Mr. Fernandez, may I state for your information that we are preparing the answer to the questions that you asked of Judge Sawyer the other day, and we will submit them from our files. I am sorry we have not had time to do that up to now. Mr. ROCKWELL. If there are no further questions, we will stand adjourned until 10 o'clock tomorrow morning. (Thereupon, at 1: 15 p. m., an adjournment was taken until Friday, March 28, 1947.) SUBCOMMITTEE ON IRRIGATION AND RECLAMATION, OF THE COMMITTEE ON PUBLIC LANDS, Washington, D. C. The subcommittee met at 10 a. m., pursuant to adjournment, in the committee room of the House Committee on Public Lands, the Honorable Robert F. Rockwell (chairman of the subcommittee) presiding. Mr. ROCKWELL. Gentlemen, we shall resume hearings on H. R. 1886 and H. R. 1977. Mr. Cone will make a statement at this time. STATEMENT OF C. E. CONE, EXECUTIVE SECRETARY, COLUMBIA BASIN COMMISSION, STATE OF WASHINGTON Mr. CONE. My name is Charles E. Cone. I am executive secretary of the Columbia Basin Commission of the State of Washington. It is a State agency. I am also representative of the three Columbia Basin irrigation districts, which are municipal corporations organized under the State law and make up the entire Columbia Basin project. These are the three largest irrigation districts in the world, the smallest one having an irrigable area of 198,000 irrigable acres. The Columbia Basin Commission carries on the legal, promotion, and the information work for the three big irrigation districts, which lacks resources, having no irrigable area to do the great amount of organization work that has been necessary. I would like to submit the telegrams from the district boards in evidence. Mr. ROCKWELL. If there is no objection, they will be inserted at this point. (The documents referred to are as follows:) PASCO., WASH., March 21, 1947. CHARLES E. CONE, Washington, D. C.: The directors of the South Columbia Basin irrigation district authorize you to represent them at hearings before the House subcommittee of the House Public Lands Committee on H. R. 1886 and on any substitute bill or bills to amend the Reclamation Project Act of 1939. The directors are opposed to H. R. 1886 and S. 539 and support the position of the Bureau of Reclamation in regard to these bills. SOUTH COLUMBIA BASIN IRRIGATION DISTBICT, EPHRATA, WASH., March 21, 1947. CHARLES E. CONE, Research Assistant, Columbia Basin Commission, Care Hon. Walt Horan, Member of Congress: The directors of the Quincy Columbia Basin irrigation district authorize you to represent them at hearing before the House subcommittee of the House Public Lands Committee on H. R. 1886 and on any substitute bill or bills to amend the Reclamation Project Act of 1939. The directors are opposed to H. R. 1886 and S. 539 and support the position of the Bureau of Reclamation in regard to these bills. QUINCY COLUMBIA BASIN IRRIGATION DISTRICT, By WILLIAM M. CLAPP, Secretary. SPOKANE, WASH., March 20, 1947. CHARLES E. CONE, Research Assistant, Columbia Basin Commission, Washington, D. C.: The directors of the East Columbia Basin irrigation district authorize you to represent them at hearings before the subcommittee of the House Public Lands Committee on H. R. 1886 and on any substitute bill or bills to amend the Reclamation Project Act of 1939. The directors are opposed to H. R. 1886 and S. 539 and support the position of the Bureau of Reclamation in regard to these bills. EAST COLUMBIA BASIN IRRIGATION DISTRICT, By DON DAMON, President. Mr. CONE. Our objection to this bill, 1886, is based upon three major considerations: The first of these is page 6, beginning with line 25, which in our opinion sets up an impossible formula for rearriving at power rates. We have the same objection to section 2, page 9, beginning with line 3, which repeats the language I just designated. Our main objections are to the language of page 10, paragraph 6, beginning line 15: All sales of electric or water power, or all leases of electric or water power privileges made, renewed, or extended after the effective date of this Act, shall be subject to the provisions of this Act. Our objection to that lies in this fact: Our allocations were made in 1944 and 1945. I sat through all the negotiations of the irrigation district directors with the Bureau of Reclamation on the repayment contracts which were based upon those allocations. Our commission carried on all the work relating to the elections on the repayment contracts. Those elections were held simultaneously in the irrigation districts on July 21, 1945. The vote of the landowners was 98 percent in favor of the repayment contracts, 2 percent against. The widest publicity was given to the 6,000 landowners; but according to the laws of the State, only those resident in the State and otherwise qualified to vote could do so. The contracts were duly executed by the district boards and by the Secretary of the Interior. The contracts themselves and all the election proceedings relating thereto have now been confirmed by the courts of the State according to the requirements of the 1943 Columbia Basin Act and the State laws governing the contracts with the United States for Federal reclamation projects. Now we have a peculiar situation which has a history. When we were trying to build Grand Coulee Dam, they said that there would be no power market. Our bonded expectations have been realized in the power market until our main difficulty today is finding power to sell. During the war seven light-metal plants were dropped into the Northwest because power was available and cheap. Mr. MURDOCK. Mr. Chairman, may I ask a question? Mr. ROCKWELL. Mr. Murdock? Mr. MURDOCK. A little before this point, did I understand you to say that certain provisions of H. R. 1886 might conflict with provisions of the law of 1943? Mr. CONE. To this extent-that the law of 1943 did not have any basis for allocation of power rates. That is still based on the 1939 Reclamation Act. That is where we come into the picture. Mr. D'EWART. Would you repeat that again? Mr. CONE. The 1943 Columbia Basin Act, Public Law 8 of March 10. 1943, sets up the antispeculation features of the Columbia Basin project, provided for the recordable contracts and the execution of same, and also sets the requirement that the Secretary should find the project feasible and report to the Congress. That report was made. Mr. D'EWART. Your point is that line 15, on page 10, repeals that act or affects it in some way? Mr. CONE. We are afraid it will: Mr. D'EWART. You do not know that it will? Mr. CONE. No. Mr. D'EWART. Nobody has been able to tell us. I have asked every witness whether it did, and nobody knows. Mr. CONE. That would require a legal opinion, and I am not an attorney. But since it makes no exemption, we assume that it does, since our allocations were made under the 1939 act and the Solicitor rendered opinion on that act as a basis for our allocations. Therefore, the connection. These light-metal plants are operating on the low power rates established by the Bonneville Administration. During the war the Government itself was the chief beneficiary of those low power rates. Now that the war is over, five of those plants have been converted to peacetime use under sale or lease. They are producing enormous quantities of aluminum. Their continuation will depend upon a very moderate power rate, because they carry a 98-percent load factor. I would like to point out that a 2-mill rate or 17.50 rate on a 98percent load factor will produce as much revenue as a 4-mill rate on a delivery basis if the power load factor were about 50 percent. This availability of cheap power and abundant power has made it possible for the United States to sell or lease those aluminum and magnesium plants as going concerns instead of consigning them to the junk heap. And they are not only recovering a substantial portion of the original investment, they are contributing greatly to the industrial benefit of the Northwest and the whole Nation. Mr. D'EWART. Before you leave that, would you explain to the committee how that affects the irrigation possibilities of that area? I am particularly concerned with irrigation. I am not particularly concerned whether Kaiser is prosperous or not. I am interested in the irrigation. Mr. CONE. Under the Bonneville Act there must be a periodic review of the returns from the power facilities in relation to the pay-out ability of the project. It is, therefore, important that our power rate be such that the power can be continuously marketed. Should it happen that power rates would be boosted on those great projects, so that they would have driven out of the area those plants, then we might not realize as much from higher rates as we now realize from low rates. And the allocations would be affected thereby. We want to make sure in this legislation that no general legislation affects our allocation until experience makes it necessary. Mr. D'EWART. Your point is that if this bill should apply to the Bonneville Power Authority-it might increase the rate to the point where it would drive out Kaiser and the other users, and therefore there would not be as much money to apply for irrigation purposes. Mr. CONE. That is right. I would like to point out further that approximately 75 percent of the cost of the irrigation system is being borne by revenues derived from the sale of commercial power. Mr. D'EWART. There are a lot of if's there. I do not follow the reasoning. The amount the farmer has to pay for irrigation is not based on the cost of that irrigation, it is based on the ability to pay, is that not correct? Mr. CONE. That is presumably the basis for the allocation. There is one provision with respect to the recapture of the interest component. There is a provisional basis in House Document 172 whereby the cost to the water users might be reduced by recapture of a part of the interest component if the Secretary of the Interior deemed that necessary to make the water users' obligation more secure. Mr. D'EWART. Is that included in the contract that you are using on those projects? Mr. CONE. As a contingent provision. Mr. D'EWART. I do not remember reading it in the contract. I read that very carefully. Mr. CONE. That is in the repayment contract. The reduction cannot be more than $15 an acre. Mr. D'EWART. There is that limitation, but I did not realize that the interest component provision was tied into the contract that the unit user of water signed. Mr. CONE. As a contingency, it isn't an absolute basis. I neglected to say that I am also a member of the National Reclamation Association, served 1 year on the legislative committee of your association. I am also a member of the State Reclamation Association and I have been experienced in irrigation work since my parents settled in the Boise region in 1909. I still have a nominal interest there in a small acreage. Gentlemen, I think that concludes my statement. Mr. ROCKWELL. Mr. Cone, may I ask you this question: I understand that Judge Stone has a bill he is going to present. Have you seen it? Mr. CONE. I have seen a portion of it. Mr. ROCKWELL. Do you think that would cover the objections you have? In other words, so there is no question about this. Mr. CONE. In my opinion it will. Mr. LEMKE. Have you studied H. R. 1977 in connection with this Bonneville project? Mr. CONE. Yes, sir, I have. |