no greater than the estimated benefits to be derived. However, when common floods are controlled, substantial investments may be made, often for housing, in the partially protected areas. Disaster follows, and the public is called upon to subsidize expensive works to protect areas which should not have been intensively developed. This could be prevented to some extent by attaching zoning requirements as a condition of obtaining Federal money for flood protection.

Under present methods of developing flood-control and navigation works, the immediate beneficiaries often do not have to pay directly any significant part of the cost. Their only contribution is through general taxation. Indeed, they are encouraged by this policy to promote costly projects which cost them nothing. Such subsidy of private individuals from the public treasury is at best unjust. Its greatest evil, however, arises from the removal of any sort of economic measure of value in terms of willingness to pay. It seems reasonable to assume that if the direct beneficiaries refuse to pay any part of the project costs, the economic soundness of the project must indeed be questionable. In the act of May 15, 1928 (45 Stat. 534, 535), it was provided that local contributions would not be required in the case of work on the Mississippi River because of the large expenditures in the past by local interests. This removal of the only real measure of worth to the beneficiaries is perhaps largely responsible for the size of the program now proposed for the lower Mississippi. Methods need to be devised requiring local and individual contributions sufficient in amount to prevent the construction of unsound projects.

Protection of Water Rights

The consumptive use of water resources of the West is governed by water rights established under State law and by interstate and international compacts. It is essential therefore, that action by Federal agencies comply with local, State and interstate rights and interests, and that State agencies participate in Federal development projects as far as their resources will permit.

In recognition of this situation, the following statement of policy was included in the Flood Control Act of 1944 (58 Stat. 887):

In connection with the exercise of jurisdiction over the rivers of the Nation through the construction of works of improvement, for navigation or flood control, as herein authorized, it is hereby declared to be the policy of the Congress to recognize the interests and rights of the States in determining the development of the watersheds within their borders and likewise their interests and rights in water utilization and control, as herein authorized to preserve and protect to the fullest possible extent established and potential users, for all purposes of the waters of the Nation's rivers; to facilitate the consideration of projects on a basis of comprehensive and coordinated development; and to limit the authorizations and construction of navigation works to those in which a substantial benefit to navigation will be realized therefrom and which can be operated consistently with appropriate and economic use of the waters of such rivers by other users.

In conformity with this policy, the act provides for cooperation in investigations between the Federal development agencies and the States. It requires that each report of the Corps of Engineers and the Bureau of Reclamation set forth the relationship between the plans proposed therein and the plans, if any, submitted by the affected States. Before transmitting their project reports to the Congress, the Secretary of War and the Secretary of the Interior are required to submit them to all affected States for review. All views and recommendations received from the States within the 90-day review period must be transmitted

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to Congress together with the project reports. In the case of the Bureau of Reclamation projects, if there is objection by any State affected, proposals shall not be deemed authorized except upon approval by act of Congress. The act also provides that the use of waters for navigation in States west of the ninetyseventh meridian be only such as does not conflict with any other beneficial use. Careful examination of the operation of these provisions is needed in order to determine whether or not they are accomplishing the object intended.

Summary

The piecemeal growth of Federal statutes governing multiple-purpose projects and the development of the activities of major construction agencies from early single-purpose objectives have resulted in rivalries which jeopardize the wise use of water resources. Under present statutes there exists multiple and conflicting jurisdiction over the various features of water resource projects. Statutory inconsistencies in methods of authorizing studies, reviewing and authorizing projects, and making appropriations create favoritism and make it impossible for the Chief Executive to formulate policies and prepare coordinated programs for water resource development.

There are major differences in the methods used by the various agencies in determining the feasibility of different features of multiple-purpose projects. Requirements for reimbursement of Federal money used to develop river functions range from almost complete subsidy of navigation, to complete reimbursement of costs plus interest for hydro power. Nonuniformity in methods of estimating cost-benefit ratios makes it difficult to judge the true merit of multiplepurpose projects. Differences in methods of allocating costs lend confusion to the search for a reasonable balance between Federal and private power development.

The laws now contain some requirements and conditions which are burdensome and illogical. On the other hand they lack requirements which appear fundamental to sound use of Federal money for water resource development.

Provision for unified administration of major Federal water development functions would do much to stimulate the adoption of a sound and consistent national water policy. The committee believes, however, that the situation calls in addition for an intensive study by a group not specifically charged with responsibility for river development. It recommends, therefore, that the proposed review and coordinating authority in the Executive Office of the President be directed to conduct a thorough examination of existing Federal water legislation, with a view to making recommendations for a comprehensive and consistent policy.

Appendix 3

REVIEWING AND COORDINATING BOARD

It would be impracticable to concentrate in a single department all of the major Federal functions involved in water resource control and development. These functions include, among others, transportation, public health, agricultural policy and land management, industrial development, energy development and distribution, recreation, national defense, and foreign policy. The comprehensive development of our great river basins will have such far-reaching social and economic repercussions that it is desirable that all interested agencies have an opportunity to present their views and to participate in that part of the planning which relates to their interests. This can be assured through a reviewing and coordinating agency located at the top level in the organization of the Executive establishment where an objective review can be obtained of project planning, project programing, and broad administrative development policies. It should be recognized at the outset that a reviewing and coordinating agency has definite limitations.

a. It should not be a planning or operating agency.

b. It cannot review and coordinate effectively if the initial responsibility for Federal water resource development functions is too widely scattered. Suppose, for example, that primary responsibility for flood control were given to the Corps of Engineers; for navigation, to a transportation agency; for irrigation, to the Bureau of Reclamation; for power development, to the Federal Power Commission; for pollution control, to the Public Health Service; for related land management functions, to the Department of Agriculture; and for construction, to a Public Works Agency. This is an extreme illustration, but it represents the logical outcome of the application of the single-purpose method of organization. It is certain that a reviewing and coordinating agency or board would find it utterly impossible to harmonize the investigations and reports of so many different agencies into a coherent, integrated development plan.

A primary condition for the successful operation of such a board, therefore, is that Federal responsibility for formulating plans for projects and for executing these plans be unified insofar as possible.1

Functions

A. With respect to plan preparation-both comprehensive basin-wide plans and project plans-the reviewing and cordinating board should enter the planning process at four separate stages:

1. When an agency proposes an investigation or survey, but before it actually initiates it, that agency should submit to the coordinating board a fairly detailed prospectus of the survey work proposed. In reviewing this prospectus, the

1 The consumptive use of water resources of the West is governed by water rights established under State law and by interstate and international compacts. Any action by Federal agencies will seek for the highest use of those resources in compliance with local, State, and interstate rights and interests, and will therefore involve as much participation by State agencies as their resources will permit.

coordinating board, possibly through field representatives, should attempt to determine its relation to the proposed work of other Federal agencies and of State agencies; to insure that adequate provision is made for the participation of all groups-Government and nongovernment, Federal and local-which have a real interest in the major water problem of the area; and to provide for the full utilization of the functional water experts available in the agencies concerned with water resources.

This first step in coordination is most important. If the many interests in river development are to be effectively represented they must be in on the planning process from the very beginning. Integration of investigations is effective if undertaken at the initiation of basin or project studies before findings are crystallized; it is largely and necessarily perfunctory if delayed until the basic conclusions have been reached independently by those concerned.

The initiating agency should not commence any proposed investigation until it has received clearance from the coordinating board.

2. When an investigation is substantially, but not entirely, completed in the field, the coordinating board, with the aid of its field representatives, should review the progress to determine whether the desired integration is being realized and whether the investigation has revealed the need for further integration or bas developed any important unresolved conflicts. It is important that the coordinating board make this check before the field investigation has been completed and, therefore, before the field office of the survey agency has announced to local interests the contents of tentative recommendations. Once a controversial and uncoordinated report obtains proponents and opponents among prospective beneficiaries, further integration and coordination becomes extremely difficult and often impossible.

3. When an investigation has been completed and reviewed in the field, fully reviewed and approved in the survey agency's Washington office, and is proposed for formal submittal to the President and/or the Congress, it should again be reviewed by the coordinating board. This final review before proposed authorization of the project, is roughly similar to that now conducted by the Executive Office of the President under Executive Order 9384. It is designed to insure that the basin or project plan, as proposed for formal authorization, represents the best combined judgment of the Executive Branch for the improvement of the area under investigation.

No project should be transmitted for authorization until it has been cleared by the coordinating board.

4. When a development agency proposes to commence construction of an authorized project, the definite project plans should be reviewed by the coordinating board. There are several reasons for this review. First, commencement of construction often follows authorization with a considerable time lag. Conditions may have changed, and the project should be checked once more before it is built. Second, many authorizations are quite broad, leaving the selection of reservoir sites and sizes and the nature of engineering works to the discretion of the constructing agency. In the exercise of this discretion there must be assurance that full consideration has been given to the interests of other agencies and groups.

No project should be put under construction until it has received a final clearance from the coordinating board.

It has been stated that it would be impracticable to concentrate in a single department all of the major Federal functions involved in water resource control and development. The recommended four-stage review will insure, among other objectives, that functions not of dominant interest to the agency conducting the

investigation are given full consideration in the planning process. Through this review procedure, for example, the transportation agency (if one is created) can be assured of participation in the planning and review of navigation projects and the navigation features of multiple-purpose projects from the point of view of transportation feasibility. The Department of Agriculture likewise can be assured of participation from the point of view of agricultural feasibility.

B. With respect to the programing and budgeting of water resource development projects, the reviewing and coordinating board should be responsible for the review and evaluation of agency 6-year construction programs.

Since all approved projects in the many basin plans cannot be built at one time, an orderly program involving priorities is necessary. Such a program is a requirement for intelligent budgeting. In this connection, budgeting is the process of selecting top priority projects from a program in the light of finances available, with due regard to the future financial commitments that the construction of such projects will involve. Provision should therefore be made for a continuing review, coordination, and rating of approved and authorized projects for programing purposes.

Programing--both the preparation of 6-year programs by the Water Development Service and the review and evaluation of such programs by the coordinating board-should place emphasis on river basins, on the coordinated timing of the many projects proposed for construction within each basin. In addition, programing should take into account the fiscal effects of public works construction. The selection of projects from long-range programs should be accelerated during periods of business depression as an aid to stabilization of employment and in times of danger as an aid to defense and war, and decelerated during periods of inflation as a means of relieving pressure on critical materials and labor and of reducing Federal expenditures.

At present Federal construction agencies submit 6-year programs to the Bureau of the Budget under Executive Order 9384. But these programs and the many projects in them are not carefully and continually reviewed, evaluated, and rated. The Budget Bureau has not had the staff for this job.

The programing function can best be made a responsibility of the reviewing and coordinating board. Budgeting, on the other hand-i. e., selecting top priority projects for inclusion in a financial program-and the coordination of public works programs for water resources with those for other purposes need not be duties of such a board, though there must be close coordination in the conduct of all of these functions.

C. With respect to the formulation of broad administrative and legislative policies for water resource development, the reviewing and coordinating board should be given the following functions:

1. The development of broad national water and related resource development policies to guide administrative agencies and to serve as a basis for executive recommendations for legislative revision.

2. The review and evaluation of agency proposals for major administrative and legislative revisions in water policies.

3. The conduct of a major study seeking to eliminate inconsistencies in Federal water law. (See appendix 2.)

4. The development of standards of feasibility, cost allocation, etc.

D. With respect to basic data, construction design, survey techniques, and the like, the reviewing and coordinating board should stimulate and coordinate research and the interchange of technical information.