blocks of power largely used by the water users and settlers, to a situation where you had what amounted to a separate investment of the Federal Government in large reclamation power.

Mr. D'EWART. Mr. Chairman?.

Mr. ROCKWELL. Mr. Barrett has the floor.

Do you yield to Mr. D'Ewart?

Mr. BARRETT. I yield to Mr. D'Ewart.

Mr. D'EWART. I wanted to put these tables in the record which are found at pages 717 and 718 of the hearings before the Appropriations Committee of this year, and I would like to ask two or three questions about these tables.

Mr. ROCKWELL. Without objection, they will be included in the record.

(The tables are as follows:)

A. Estimated effect of interest component application on average firm power rates [From repayment schedules for power systems on Bureau of Reclamation projects]

Repayment period totals, with all or part of interest component applied to amortization of irrigation

plant.

* Commercial firm and nonfirm combined.

B. Estimated effect of interest component application on average firm power rates [From repayment schedules,for power systems on Bureau of Reclamation projects]

1 Repayment period totals, with revenue from firm power sales increased sufficiently to amortize the same irrigation investment without benefit of interest.

C. Estimated effect of interest component application on average firm power rates [From repayment schedules for power systems on Bureau of Reclamation projects]

1 Repayment period totals with revenue from firm power sales increased to absorb interest component applied to amortization, and decreased by earned surplus available and applicable to amortization of irrigation investment.

NOTE.-Projects not included above, in which no interest component is involved in amortization of irrigation investment, are as follows: Columbia Basin, Minidoka, Boulder Canyon, Yuma, Missouri Basin (Kortes), North Platte.

Summary of interest component fiscal years 1940 to 1946, inclusive

Mr. D'EWART. First, they were put in the record at the request of Mr. Jensen, who asked, and I quote from the hearings:

I am going to insist that you give us a table showing how much interest has been collected and reused on every project to date; how much interest you have figured in your repayment schedule which you have presented to us for every project.

And then a little further:

Then I shall ask you to make a complete new chart showing what rates will be necessary for you to charge on power in order to pay out according to law without the use of the 3-percent interest.

The first table, as I understand it, says:

Summary of interest component fiscal years 1940 to 1946, inclusive.

And then it lists the projects in which these interest components have been applied, and I take it it includes all projects that could possibly be included, and according to you, some that should not be included, and it gives the amount collected during those years as "Amount applied to irrigation costs", $5,787,807.

And it specifies these items for each individual project. Am I to understand that this much of these items in dollars and cents was applied to the irrigation cost on each particular project as specified in this table? Is that your understanding?

Mr. STONE. Congressman, may I see that table? Do you have it there?

Mr. D'EWART. Yes; I would like to have an explanation of these tables.

Mr. STONE. Perhaps the best explanation of that would be for me to refer to particular projects in that table.

Mr. D'EWART. Well, I want to have you refer to the Fort Peck and explain to me how $316,159 was applied to irrigation costs at Fort Peck and where it was spent.

Mr. STONE. Let me take the Yakima project, may I? I looked that law up.

Mr. D'EWART. I do not know as much about that one as I do about the Fort Peck.

Mr. STONE. I believe the law which refers to the power on the Yakima project was passed in 1930.

It also provided, as did the 1906 act, that all returns from power shall be credited to water-users' contracts. It did not contain any reference to an interest charge on the investment in commercial power. All of the moneys from that project, and I believe it is typical of a number of these earlier projects which are listed here, all of the money, whether it came from irrigation or whether it came from power, was paid into the reclamation fund and credited to the particular project.

That was in accordance with the provisions of the reclamation law. Now, there being no interest required to be collected, the Bureau, as I understand it, merely set up what is called here an "interest component" for the purpose of fixing rates.

But there being no interest, the total returns from the rates, which only theoretically contained an interest component, all of the returns went into the reclamation fund to the credit of the particular project.

So, in setting up this table—and I am not an authority on these tables, because it requires considerable study, and perhaps statements from experts as to just what they mean-but apparently what is done here is to ascertain the revenues which are derived from the power rate which was established, by using the various components of that rate and applying the returns against the cost of the project.

And you can see, Congressman D'Ewart, that as to those early projects, like the Yakima and some of these other early ones, the law specifically provided that all returns from the power should be credited against reclamation cost.

Mr. D'EWART. But take the case of Fort Peck. That was not built with reclamation funds. That was built by Army engineers. Mr. STONE. I think the same principle is involved.

Mr. D'EWART. Would you like to answer this, Mr. Warne?

I have several questions here, and I think maybe these tables apply to just what is before us.

FURTHER STATEMENT OF WILLIAM E. WARNE, ASSISTANT COMMISSIONER, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, WASHINGTON, D. C.

Mr. WARNE. I think I can answer your question on Fort Peck. There is an allocation of the cost of the power facilities at Fort Peck Dam.

Now, that is set up under the law, the Forst Peck Act, which the Bureau of Reclamation does administer. That allocation includes an amount for irrigation power, power to be used on irrigation projects. Now, that section of the allocation

Mr. D'EWART. Would you say that again?

Mr. WARNE. Yes, sir.

Mr. D'EWART. So I can get it clear?

Mr. WARNE. Yes, sir.

The application of the cost of the power project at For Peck Dam contains an allocation to irrigation power which is repaid without interest.

Mr. D'EWART. Even though it is built by the Army engineers with Army engineer funds?

Mr. WARNE. Oh, yes, sir.

The reason for that is that the power project is set up in accordance with the Fort Peck Power Act which is not a reclamation act.

Mr. D'EWART. Then this $316,000 credit to Fort Peck is really applied on the construction cost, power construction cost, up to this time, since there is no irrigation in connection with it at all.

Mr. WARNE. No. In reality, the 300 plus thousands of dollars. there, has not been collected. In reality, it has not been collected because of the absence of an interest charge on that section of the allocation of the Fort Peck Dam.

Now, the question Mr. Jensen raised, certainly included instances of that sort.

Here is $300,000 which we would have collected had the entire cost of the project been allocated to commercial power, but a section of it was an allocation to irrigation, irrigation power to be sure, and therefore the $300,000 was not collected, and in that manner, a lower rate is obtained for irrigation projects in and near the Fort Peck

area.

Mr. D'EWART. Well, if my memory serves me right, both Bonneville and Fort Peck, the rate of interest to be charged is 22 percent, and has to be charged.

I think those two acts are very similar, both Fort Peck and Bonneville.

Mr. WARNE. My adviser says that the Fort Peck Act itself does not require any interest, but that we have set up an interest charge on the commercial power section.

Now, I do not know. That is a very complicated explanation, but that is the explanation for showing $300,000 there against the Fort Peck project.

Mr. D'EWART. Then in the Columbia Basin, you show an interest component of $10,965,000 and there is irrigation under that project. at the present time, or irrigation construction, but none of that $10,000,000 has been applied to irrigation cost.

Mr. WARNE. In the allocation report on the Columbia Basin project, which was in the process of making at the time the Solicitor's opinion was rendered, the interest component is set aside in the reclamation fund, later to be applied against irrigation and power rates.

And as a matter of fact, the contention was made on the floor of the House while this appropriation bill was in process, this week, that that money was in the fund and available for reappropriation.

Mr. D'EWART. And that brings me to my next question, which shows that there is a total of these so-called interest component collections which may not have been collected of $5,787,000, and Mr. Jensen, in his statement on the floor, says:

In passing I think I should make some mention of where we found the money. It is money in the suspense account of the Bonneville Power Administration which will cover this amount.

Is this the item?

Mr. WARNE. That $10,000,000 item is the item to which Mr. Jensen referred, in my judgment.

Mr. D'EWART. $5,787,000 is the total of these amounts applied to irrigation cost which you say are in suspense.

Is that the suspense item?

Mr. WARNE. I will have to see your table, Mr. D'Ewart.

Mr. STONE. Maybe this is it, I do not know.

Mr. D'EWART. It is at the foot of the right hand column, $5,787,000.

Mr. WARNE. Mr. D'Ewart, you will note at the top of the second line, there is $10,965,854 which is excluded from your $5,787,000. Mr. D'EWART. I am speaking now on page 717.

Mr. WARNE. Yes; I have that here. Page 717, Columbia Basin project.

Mr. D'EWART. $10,000,000.

Mr. WARNE. $10,000,000.

Mr. D'EWART. Yes.

Mr. WARNE. It is that $10,000,000 to which Mr. Jensen referred, in my understanding.

Mr. D'EWART. I see.

Mr. WARNE. As a suspense account.

Mr. D'EWART. In other words, out of that one project, Columbia Basin, and not out of the sum of all of them.

Mr. WARNE. That is my understanding. He referred to the $10,000,000 as being in a suspense account, and there is such a suspense account in the Treasury at the present time.

Mr. D'EWART. Well, if I understand you, then, there is a suspense account but the money is not actually in it.

Mr. WARNE. Yes, the money is there.

Mr. D'EWART. You told us in the case of Fort Peck, you had set but had not collected it.

it up

Mr. WARNE. Well, now you are referring to Fort Peck.

Mr. D'EWART. So it could not actually be in there.

Mr. WARNE. Let me make myself clear.

The suspense account includes only $10,000,000 plus shown on that table, page 717, to be earned by the Columbia Basin project. It does not include any part of these other funds totaling $5,000,000-plus in the same table.

Mr. D'EWART. Some of these projects you have collected and some you have not?