will, it is believed, alone repay the entire cost of these works with interest at 4 per cent. With this general outline of the development program favored I submit comments on features of the bill which are approved and others which it is believed should be modified. The necessity for the all-American canal and the size and cost of this canal depend largely on whether the existing concession under which water is now diverted from the Colorado River at Hanlons Heading and carried through Mexico to irrigators in the Imperial Valley can be modified. If it can not be, then the all-American canal becomes an indispensable part of this development. Under this contract or concession the Mexican Government gave a corporation permission' to build and operate a canal across Mexican territory to irrigate land in California on condition that Mexican irrigators be given, if they desire it, one-half of all the water diverted into this canal from the Colorado River. Hence the canal has to be double the capacity required to meet the needs of California. The river has to supply double the water needed in California, and the rights of Mexicans to water under this concession grow as the irrigated area is extended in California. The canal now supplies water for the irrigation of over 400,000 acres in California, and irrigators in Mexico at present require water for the irrigation of 200,000 acres. But Mexican irrigators are entitied under this concession to double the volume they are now using, or for enough to irrigate as many acres as are now irrigated in California. That is more water than the unregulated flow of the river will now supply. As the Mexican irrigators are on the upper end of the canal, the pinch of scarcity, when it has come in the past or when it may come in the future, falls first on irrigators in the United States, which country supplies the water, all the construction cost, and all the money advanced for operation. It is unfair to California irrigators now and will be even more so after the reservoir is built. It is physically possible to irrigate much more than 400,000 acres from this canal in Mexico. If this concession remains in force without any amendment and the canal continues to be used as now, the irrigated area in Mexico will continue to extend. The volume needed to be diverted from the river would be more than the direct flow at the low-water season, and the area irrigated in California would be subject to ruinous uncertainties and loss. If storage is provided, a part of the water for the irrigation of lands in Mexico would, under this concession, have to be supplied from the reservoir, as this canal would be the only means of conveying water to the Imperial Valley and it can be operated only if the terms of the Mexican concession are complied with. If, however, the Government of Mexico would consent to a modification of this concession and definitely limit the volume of water to which Mexican irrigators would be entitled, then the future use of the present canal would be economical and desirable, a smaller high line could be built and utilized mainly for the irrigation of the higher lands of the Imperial and Coachella Valleys. Thus far, no negotiations for the modification of this concession have been made. It is not known what the attitude of the Mexican Government would be, and plans for this development should therefore include provision for an all-American canal as an essential part of the scheme. The building of a unified power plant by the Federal Government in the place of allocating power privileges, as proposed in the bill, is regarded as more efficient and cheaper. It will obviate controversies between applicants, and long delays in their adjustment. In the end, results will, I believe, be superior to those possible under an allocation of privileges. The area for the location of separate power sites is restricted. Allotments would not be equal in value. Some allottees would, therefore, have an advantage over others. It would 1 The Sociedad de Riego y Terrencs de la Baja California S. A. is authorized to carry through the canal which it has built in Mexican territory, and through other canals that it may build, if convenient, water to an amount of 284 cubic meters (10,000 cubic feet) per second from the waters taken from the Colorado River in territory of the United States by the California Development Co., and which waters this company has ceded to the Sociedad de Riego y Terrenos de la Baja California S. A. It is also authorized to carry to the lands of the United States the water with the exception of that mentioned in the following article. From the water mentioned in the foregoing article, enough shall be used to irrigate the lands susceptible of irrigation in Lower California with the water carried through the canal or canals, without in any case the amount of water used, exceeding one-half of the volume of water passing through said canals. 92066-26-PT 1-2 result in the creation of operation and administration controversies to be avoided and which a unified development will avert. The transmission lines for the distribution and retailing of this power should be financed by its purchasers. To secure the greatest economy, main transmission lines leading to different localities should be constructed for joint use. This plan of power development is not an experiment. It has been adopted by the Government with satisfactory results in the construction of other reclamation works, where the generation of power is an incident to irrigation development. Salt River, Minidoka, Lahontan, and Guernsey are illustrations. Section 6 provides that no part of the construction cost of the dam and the appurtenant works shall be charged against any lands irrigated by the waters of the reservoir. If the all-American Canal is to be considered as an appurtenant work, the bill should be amended. It is believed that the sales of water from this canal will return not only the cost of operation and maintenance but pay construction costs without interest, as is done on other reclamation projects. All revenues from power, irrigation, and domestic water supplies should be placed in a common fund and used for the payment of interest, operating expenses, and build up a sinking fund for redeeming the entire bond issue. In order to give assurance before any large expenditure is incurred that the anticipated revenues from this development will be obtained, the bill should contain a provision that before any bonds are issued and sold and before awarding any contracts for construction, the Secretary of the Interior shall secure the execution of contracts with irrigation districts, municipalities, and corporations, on terms to be fixed, for the delivery of all water to be supplied for irrigation, domestic, and municipal uses, and shall obtain definite commitment for the purchase of power from responsible bidders in an amount to insure a sufficient return from this development to repay the money to be expended with interest within a period of 50 years. Section 8, which provides for the distribution and use of all water for irrigation, power and otherwise, in accordance with the Colorado River compact, seems well conceived and is a necessary part of this legislation. This appears to afford ample protection and assurance to those States included in the upper division of the watershed against the creation of a priority of right through the building of these works, which would impair in any way their right to the volume of water guaranteed to that division in the compact. I suggest for consideration amendment to the effect that the benefits to be derived from this development shall be available only to those States or the citizens of those States which have ratified the compact. 66 I suggest the amendment of section 9 as follows: In line 1, page 11, strike out the words "the proportionate share" and insert in lieu thereof the words an equitable share in accordance with the benefits received." After the word "lands in line 15 insert " subject, however, to the provisions of subsection C of section 4, act of December 5, 1924 (43 Stat. 702)." The first amendment suggested is designed to avoid the necessity of fixing a flat rate charge without regard to the classification or quality of the land. Experience has shown that a flat rate charge is undesirable in some cases. The second amendment I believe of prime importance. If soldiers and sailors are to be given a preference, experience has shown that provision should be made for selection. This is desirable for the protection of all prospective entrymen, soldiers, and sailors, as well as civilians. Since section 1 provides for the building of a dam either at Black Canyon or Boulder Canyon, I suggest that line 11, section 10, be amended so as to designate the subfund there mentioned as the " Colorado River Dam fund," which would be applicable in either case. The present designation might possibly prove a misnomer. I suggest the following proviso be inserted at the end of section 10 of the bill: "Provided, however, That no work shall be begun and no moneys expended on or in connection with the works or structures provided for in this act until the respective legislatures of at least six of the signatory States mentioned in section 13 hereof shall have approved the Colorado River compact mentioned in said section 13 and shall have consented to a waiver of the provision of the first paragraph of article 11 of said compact, making the same binding and obligatory when it shall have been approved by the legislatures of each of the seven signatory States, and until the President, by public proclamation, shall have declared that the said compact has been approved by and become binding and obligatory upon at least six of the signatory States." An approximate estimate of cost, operating expenses, and income leaves no question as to the ultimate solvency of this undertaking if carried out along the lines proposed. The main source of revenue will be power, and the rate assumed is lower than the wholesale prices now being paid in the West. Those of which we have information range from 3% to 8 mills per kilowatt-hour, measured at the switchboard. As the largest consumers of this power would be distant, a low figure of 3 mills per kilowatt-hour at the switchboard has been assumed in the estimates which follow: Colorado River Development-Boulder Canyon Reservoir, All-American Canar Interest during construction on above, 5 years, at 4 per cent-- 21, 000, 000 Total___ ANNUAL OPERATION 125, 000, 000 Estimated gross revenues from Sale 3.6 billion kilowatt-hours power at 3/10 cent_- Storage and delivery of water for irrigation and domestic purposes-- Estimated fixed annual charges for— Total_ Operation and maintenance, storage and power_.. $10, 800, 000 1,500,000 12, 300, 000 700,000 500, 000 5, 000, 000 6, 200, 000 Estimated annual surplus, $6,100,000, or thought to be sufficient to repay the entire cost in 25 years. The height of this dam as fixed will not prevent the construction of the proposed dams at Diamond Creek or Bridge Canyon. The approval of this project should open the way for other development and encourage the construction of projects above this dam for development of irrigation, power, or other purposes. Although the difficulties of construction and magnitude of the proposed structure compared with any other for similar purposes are unprecedented, assuming that it is a feasible engineering possibility, the Reclamation Bureau of the Department of the Interior as now organized, with its present commissioner, is competent to construct the works contemplated in S. 1868. With the amendments suggested, I recommend the favorable consideration of this bill by Congress. Respectfully submitted. HUBERT WORK. The CHAIRMAN. At our last meeting we concluded that it would be wise to have a tentative bill prepared containing some suggestions that had been made, and we have a "committee print" this morning which I assume will be the basis of our considerations in this meeting. Mr. SWING. Mr. Chairman, pursuant to what I told the committee at the last meeting, with such assistance as I could get, not only from interested parties themselves but also from the department, I have been at work undertaking to embody in my bill the suggestions of the Secretary of the Interior and now have before the committee, under the title "committee print," a bill, which I believe substantially conforms to the recommendations of Secretary Work, and I am agreeable to the chairman's suggestion and ask that the testimony and consideration be directed toward this "committee print." The CHAIRMAN. Don't you suggest that the "committee print " also be inserted in the record? Mr. SWING. I think it would be a good suggestion. Possibly you can reserve that decision until a little later, but it is agreeable to me. The CHAIRMAN. Is it the wish of the committee that this bill be read before we proceed? Mr. HAYDEN. I think we ought to know what we are talking about. Mr. LEATHERWOOD. May I make an observation, Mr. Chairman? I think it was at our former meeting the matter was discussed and certain observations made, particularly by gentlemen of the committee who represented cities or districts in one or the other of the basins of the river. At that time I understood there was no objection to proceeding with the hearing of any witnesses who might want to get away immediately or whose business was such that it would be advisable to hear them. I am only voicing my own personal views. This legislation involves some very intricate questions with reference to the allocation of the water of the river and a number of other very important features. Personally, I should like to have an opportunity to make a careful study of the bill so that as to those points that I am not clear about I may be in a position to ask at least intelligent questions of gentlemen who may appear here prepared to give all of the details of the matter. Before any witnesses are called to testify as to what I might term the technical phases of the bill, I think each member of the committee ought to have an opportunity to carefully study this bill. Mr. SWING. That is agreeable. Mr. LEATHERWOOD. It is difficult to ask questions that you want to ask until members of the committee thoroughly understand the nature of the bill. I only make that observation as one member of the committee. As I said the other day, I have no objection to proceeding at this time and hearing any witness who feels that he must be heard early in the matter. The CHAIRMAN. I do not think it was understood that we would complete the hearings to-day; but that we would have a formal statement from Doctor Mead and then determine what the procedure should be after he had made a general statement. Mr. LEATHERWOOD. I suppose the doctor, being a very goodnatured gentleman, would return here at any time for us to get further information. The CHAIRMAN. I have no doubt he is always willing to respond to the wishes of the committee. Then I will read the tentative print of the bill. (The committee print of the bill is as follows:) A BILL To provide for the protection and development of the lower Colorado River Basin Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, for the purpose of regulating the lower Colorado River, controlling the floods therein and equating and stabilizing the flow thereof, providing storage of the waters thereof for reclamation of public lands and other beneficial uses within the United States, and for the generation of electrical energy as a means of making the project herein authorized a self-supporting and financially solvent undertaking, the Secretary of the Interior is hereby authorized and directed to construct, operate, and maintain a dam and incidental works in the main stream of the Colorado River at Black Canyon or Boulder Canyon adequate to create a storage reservoir of a capacity of not less than twenty-six million acre-feet of water and a main canal and appurtenant structures located entirely within the United States connecting the Laguna Dam or other suitable diversion works to be located and constructed by the said Secretary on said river as a part of said canal with the Imperial and Coachella Valleys in California; also to construct and equip, operate and maintain at or near said dam a complete plant and incidental structures suitable for the fullest economic development of electrical energy from the water discharged from said reservoir; and to acquire by proceedings in eminent domain, or otherwise, all lands, rights of way, and other property necessary for said purposes. SEC. 2. That the Secretary of the Treasury is hereby authorized to borrow on the credit of the United States from time to time as the proceeds may be required to defray the expenditures authorized by this act (such proceeds when received to be deposited in a subfund of the reclamation fund established under the reclamation law and to be designated "Colorado River Dam Fund and to be used only for the purpose of meeting such expenditures) the sum of $125,000,000, or so much thereof as may be necesary, and to prepare and issue therefor coupon or registered bonds of the United States, in such form and denomination as he may determine, redeemable in gold coin at the pleasure of the United States after fifteen years from the date of their issue and payable in not to exceed fifty years from such date, and bearing interest at a rate not exceeding 4 per centum per annum, payable semiannually in gold coin: Provided, however, That the Secretary of the Treasury, in his discretion, may, at the request of the Secretary of the Interior, issue said bonds in series maturing in successive years commencing not earlier than fifteen years from the date of their issue, but all maturing in not to exceed fifty years from such date. SEC. 3. That the sum of $105,000,000 is hereby authorized to be appropriated from said subfund from time to time upon estimates of the Secretary of the Interior for the construction of the works herein authorized; and the Secretary of the Treasury is hereby authorized to pay out of the unappropriated balance in said subfund interest on said bonds during the period of the construction of the said works and until revenue therefrom for such purpose is received. Revenues from said project shall also be deposited in said subfund and are hereby reappropriated for operation and maintenance purposes, and payment of interest upon and amortization of said bonds. SEC. 4. (a) No work shall be begun and no moneys expended on or in connection with the works or structures provided for in this act, and no water rights shall be initiated hereunder, until the respective legislatures of at least six of the signatory States mentioned in section 12 hereof shall have approved the Colorado River Compact mentioned in said section 12, and shall have consented to a waiver of the provision of the first paragraph of article 11 of said compact making the same binding and obligatory when it shall have been approved by the legislatures of each of the seven signatory States, and until the President, by public proclamation, shall have declared that the said compact has been approved by and become binding and obligatory upon at least six of the signatory States. (b) Before any bonds shall be issued or sold, or any construction work done or contracted for, the said Secretary shall provide for revenue hereunder, by contract or otherwise, adequate, in his judgment, to insure payment of operation and maintenance expense of the works herein authorized to be constructed, interest on bonds (except interest during construction), and amortize the bonds within fifty years. SEC. 5. That the said Secretary is hereby authorized, under such general regulations as he may prescribe, to contract for the storage of water in said reservoir and for the delivery thereof at such points on the river and on said canal as may be agreed upon, for irrigation and domestic uses, and delivery at the switchboard to municipal corporations, political subdivisions, and private corporations of electrical energy generated at said dam, upon charges that will provide revenue which, in addition to other revenues accruing to the said subfund under the reclamation law or hereunder, will cover operation and maintenance expense of works constructed hereunder, interest on bonds |